We initially signed a contract for asking price on the property and I subsequently asked for $20k break on the price based on the inspection results, which I thought was a fair ask and the seller signed the addendum accordingly.Now the seller is asking me for another $6k to cover costs of heating unit replacements (after further inspections done by the seller as required by the city) since the units are over 50 years old and cannot be brought up to city inspection requirements.

We initially signed a contract for asking price on the property and I subsequently asked for $20k break on the price based on the inspection results, which I thought was a fair ask and the seller signed the addendum accordingly.Now the seller is asking me for another $6k to cover costs of heating unit replacements (after further inspections done by the seller as required by the city) since the units are over 50 years old and cannot be brought up to city inspection requirements.

Nothing in this section shall be deemed to affect the legal status of a secondary dwelling built with a lawfully issued permit if the property is subsequently transferred or sold, or if the one-family dwelling or secondary dwelling is subsequently rented or leased.https://library.municode.com/ca/san_jose/codes/code_of_ordinances?

The owner of record -- the one shown as the grantee in the current deed recorded among the land records -- will need to execute the deed transferring the property.So let's say you acquired the property in the name of LLC1 (the owner of record) and subsequently ownership of this particular property/membership interests representing it was transferred to a subsidiary LLC2.LLC1 will be signing the deed.

I was thinking of finding a fixer first and offering it to investors via direct mail (pitch is: investors buy off-MLS, the sellers pay me a minimal commission - so they net more, but I get the subsequent remodel listing from the investor. ) But, it would mean I have to lie to the seller, claiming I have an investor, when I don't. 

Is there a bank or lender out there that will allow him to refinance the home and subsequently owner finance it to a buyer? 

The refinancing idea only works on a relatively quick time scale if, for that same $120k subsequently appraised value, you only paid $90k (or less), all-in!

RELIANCEONRENTALINFORMATION:Outside of a sale-purchase scenario, this Lease agreement is often executed subsequent to Tenants completing a Rental Application and their rental application being accepted.

(You will replace carpet on subsequent turnovers.)  

Therefore, you shouldn't file Form 3115, Application for Change in Method of Accounting, to make this election or to stop applying the safe harbor in a subsequent year.