The new property has to perform enough better than what you have to pay the higher interest rate on the higher balance, AND ADDITIONAL profit just to payback the $65k you lost selling.

$500,000 after taxes is likely close to $325,000(maybe more or maybe less).Assuming cash-flow from rentals is offset by depreciation, you would need $325,000 of annual cash-flow from the rentals.If you can get $200 / door / monthYou would need 135 doorsYou can work on this type of math to figure out how much rentals you need.Be mindful that rentals require some type of work.

SEEKING feedback from other Sellers of rental or primary residence homes who have dealt with SINGH Development Company agreeing to Seller Carryback Finance terms and "the end result" from beginning to end of contract terms.The proposed offer is for 7 years, $600 monthly payment to Seller, balance due at end of 7 years, 0% interest as final overall price paid to Seller after 7 years from date of closing is inflated to $270,000.

The Seller is required to disclose any material defects and a fire would definitely fall into that category. 

An LLC requires time and money to create and maintain, every year. 

A heloc can "never" be used as an "Asset" or Liquid reserve both required when you purchase additional rental properties. 

A lot of loans require that you already own the land outright before they will provide funding but there are tons of different options.Once you have the funding piece figured out, I would discuss with a builder and try to price it out.

He *seems* to be making an effort to square people away and talks all sincere, but everything we've seen to this point I won't trust a word of it until my balance in full is wired into our checking account.

I just want to do things within the law and if a RE license is required then I can certainly get it within few weeks IF NEEDED. 

I understand a fixer-upper would require a lot more work in accurately determining repair costs, finding good contractors, etc., but I think the learning experience would help set me up better for future deals.