The closed sales price (if it is recent, hopefully under 6 months) will be a good indicator of value for you.   

Many times, when i replace a water heater and take a look into some of the short pipes that connect, they are approx 80 percent closed. 

Just not seeing any rents close to the property for 3/4 bedroom properties that would cash flow for a mortgage that size.

if you're beginning conversations with agents, and they don't recommend that you sign this agreement before the close on a property, is that a good thing or a bad thing? 

Let’s be real: Not every deal is going to close. 

A close friend of the family ,who was married, and had a house together got divorced and in between that time, she did a QC and removed her name from the deed.

I work closely with a cash buyer in the Rochester ny area. 

Account Closed that's not the case as long as you live in it as your primary residence for 12 months.

Ideally, I would like to buy a 2-4 unit, but I'm not closed off to a single family and renting out the rooms.Any advice would be greatly appreciated!

If I understand correctly; the seller would receive 80% ($40,000) directly from the mortgagee at closing and would enter into a personal agreement with me for the 20% down payment ($10,000) in which he would be reimbursed separately from my mortgage payments at a separately agreed upon rate and term?