Reason being the current owner told me he is heading to jail for a couple years and we can do the deal via mail and his attorney or we can do a contract now with the stipulation of getting a mortgage and also my satisfactory walk through. 

Stipulate the financial/operating documents the Seller must provide in the PA, then reconcile them to what you originally received from them (ex, you received a rent roll but it didn't show half the leases already went month to month or some had no security deposit) This can be an issue if the property was not professionally managed/some owner was winging it. 

We offered a reduced price via closing costs credits, and additional favorable stipulations.

That is a buyer's decision.Elsewhere on the contract, it should stipulate the process for resolution of a dispute or need for repairs, etc.  

Most of the ones I looked into had an owner occupied stipulation, but we shall see!

Yes - though I believe the stipulation is: become a Plus/Pro Member first.

In a wholesale deal, your end buyer comes to the table with cash and the only hurdle is having the ability to pick your own title company (your offer would have to stipulate to pay title costs) so that you can double close the transaction as Ryan mentioned.Ryan, if one has the luxury of having cash to buy and the cash buyers to sell to, then REOs are just fine.

What stipulations are ideal for friend/family investors?

I am sure the majority is tax and liability stipulations, but wasn't sure. 

Moving forward, you may have a better outlook on how you want to set up your next lease and whether or not you would like to include or remove any current stipulations.