The hope is that will help you decrease expenses and/or gain income.Always remember to do the math analysis and try to look at prospective properties or have a contingency clause in the purchase contract that allows you some upfront time (about 10 days) to make a detailed inspection and possibly back out of the deal without a penalty that hurts you too much.  

Now rather than losing money by having the equity sitting in the property you have converted it into a revenue generating function AND you are utilizing debt to to generate revenue as well, without decreasing your cash position.  

A sellers physiological commitment to the property decreases after signing escrow docs and increases your chances of getting what you request.Franklin

Lease options, contract for deed, seller financing.....My goal is to create passive income, decrease tax liability, have access to the home equity (to pull back out the money we invested and continue to the next property). 

Getting a mortgage that requires 20% will help decrease you monthly payment and while typically be offered by most lenders if you have good credit.

Could I expect the decrease to be 8% again?

There might be a shortage of buyers looking for larger townhouses, which may call for a decrease in price.

We use Listerhill Credit union in muscle shoals.

I would just leave tenants in the home until I pay off enough of the loan to sell it, but the tenants are complaining and at some point here I won't even be able to have renters, and the home is only going to decrease in value as it falls apart.The $60,000 quote came from a market analysis the property manager had done on the home, and it is right in there with every AP like zillow etc (I know they aren't typically accurate, but the market analysis should be).

Self-employed individuals have income they write off -underwriters can verify and put those write offs back to increase the income/decrease the debt-to-income ratio.