There may need to be some compromise and understand as a wise 30+ year old, we were all once children but have boundaries on quiet time etc.  

I am right now thinking about owner-occupant however I have children and their routine and comfortability may be greatly compromised.

I wouldn't compromise your safety for a bad area..    

If you are finding, negotiating, managing, leasing, and keeping the books on the deal, that is worth a lot to you, and you should not compromise your position just because you're afraid of asking for additional equity share.

So while I know other states may have great cashflow, they tend to not have the decade-over-decade appreciation that I've grown up around and makes me feel safe and warm at night.My hope is that there are outlying areas (perhaps like the ones I mentioned) that might be a nice compromise between cashflow and long-term appreciation.

I asked for some sort of compromise and he is indicating NO.  

@Andre Crabb Miami does seem pretty tight and I can imagine that you may have to compromise on location, which is something you definitely don't want to do.Have you found anything further North or do you have any recommends around the Ft Lauderdale area?

If you both agree / compromise on everything, then the friendship can't get in the way later.

It is not that difficult for a lender to review this set-up and ask a few questions of the insurance company and be completely satisfied that their claim to first position lien holder and being fully insured is not compromised at all by the policy.   

Do we wait, and as the 1st gets closer to auction hope there's a similar increase in interest to compromise (as litigants felt when they began to feel the whites of jurors' eyes)?