However after talking to buyers I am unsure since the 50k downpayment seems unattractive to alot of them.  

It may be common for a home of that age to have a failed sewer lateral, but that doesn't mean you have to accept it.

If you are in the market as a realtor, particularly at this stage of the cycle, you know how to generate leads.A slight shift in focus from listings & buyers to distressed purchases is the move to make. 

Your income level of $84-95K  plus 75% of rental income should make you a well qualified buyer.  

., Zillow, Redfin) and listing services to generate buyer/seller inquiries.

What many fail to recognize is the media and their source of information continues to feed this fallacy (mostly because they charge you to be a part of the community) and it will not end well for many.

Please put me in your buyers list for potential off market deals!

Any help/advice on what kind of financing to go for (FHA/conventional/first time home buyer benefits) and any insight on how best to do this with a partner would be greatly appreciated.

IM located in PHX,az and would like to know the name of this deal scenario where buyer agrees to pay off completly sellers loan balance, for example , lets say seller owes $50k on a $350k home buyer agrees to pay seller that $50k and is the new owner of said home.

It's because he had a willing and able buyer who planned to purchase the property at a steep price of $950,000.