Negotiate, negotiate, negotiate... yes i was taking the sellers position and safety.. however its something to keep in mind if they balk a little one could offer this does not have to super high rate maybe just a tad over the wrapped rate. but one could show them the math on it and it might swing the deal plus when they learn that its a safer way to do these it could also put the buyer in good standing with the seller ??

I have the opportunity to buy from a motivated seller. 1 acre with four lots consisting of 3x POHs and 1x TOHs, plus a single detached garage that can be rented out as a mechanic shop.

@Kirk Roberts, first off if your accountant believes 1031 exchanges are too difficult you might want to shop around for another accountant.

Sometimes, different lenders have different rules or ways of doing things, so it might be worth shopping around a bit.

The mortgage shop will do them but they have to be above 450 sq Ft I believe 

I've been recently quoted 10%, seems a bit steep...Not the most absurd I’ve heard - MF purchases 5+ units will typically range in the 9% range, especially if you are shopping wholesale lenders and not local commercial banks.

Happy to get together for coffee and talk shop if you're ever interested.

In general, from a business standpoint, the townhomes would be easier probably, but if you just have a passion for the idea of keeping the streetfront activated with a couple of shops, and it makes you happy without putting you in the hole, then do it.

That said, I personally wouldn't invest in that type of area, in my opinion (for whatever that's worth) I'd advise taking on some debt and going a little higher in price to get a more consistent area that will provide a safer investment. 

Depending on your personal finances, shopping for a triplex or quadplex may require the existing market rents to pass a self sufficiency test, to ensure that you will be able to pay the note.