Most often it's in free & clear properties but, in a high enough desire area like these, and with low enough mortgage balance, yup, some can 100% get enough on the sale to have it all make sense because as @Jay Hinrichs has pointed out that in these areas the majority value is in the land not the structures on the land. 

Definitely recommend the seller financed buydown as if you refinance whatever the remaining balance from the buydown is can be used to pay down the principal balance of your loan. 

Have any of the investors simply requested a balance sheet for the company to see what the assets and liabilities are and if there is equity ? 

It's a balance of cashflow and wealth accumulation.One of the goals is to have tenants pay as much of your cost-of-ownership as possible (loans, taxes, insurance, etc.)In high-cost areas, any Class A or B property you buy will usually negative cashflow for the first 3-5 years, until rents rise enough to cover the negative cashflow + rising taxes & insurance.Investing OOS increases your risks because you may not know the market and you can't check on everything/everyone all the time.If you move forward with your buddies, HIGHLY recommend creating a solid Partnership Agreement!

I have about 150k equity in my home and have $215k balance on my mortgage.

IME (in my experience), you would charge a fee (say 50-100 basis points) to the banks/investors, often times based on the either the commitments or the outstanding balance of the fund. 

Do not forget to prepare the balance sheet, track distributions etc.

Wages will also go up, and we will see a better labor/capital balance as we negotiate end-stage capitalism.  

They may have just paid the entire balance that accrued at one time.

Eventually, you’ll look back and appreciate that you took the leap, even if it felt a bit off-kilter at first, kind of like trying to balance on a beam after a strong cup of coffee.