My agent is saying that we are unable to split the contract that way (or reduce the purchase price), so I'm trying to figure out options.

His reason was the only thing he knew to do with the proceeds was to loan it back out at 12%, and he would be "behind" where he is now in cashflow.His proceeds would have given him options up to and including PE, but he is a simple man and in his case holding was the option for now. 

Some types of Creative Financing include: Seller/Owner Financing, Land Contract, Wrap, Assumption, Subto, Lease Option, Contract for Deed.

@Polat Caglayan The majority of investors who become involved in the section 8 program do so because they purchase lousy real estate and leasing the units to section 8 tenants is the best option on the table.

Do you see them as a viable option early on, or is it better to avoid them altogether?  

Your best/safest bet would be a regular lease combined with an option to purchase.

Sounds to me option 1 will be best though.   

All mortgages contain a “due on sale clause” which states that the lender may, at its option accelerate (call note due) if a transfer of the property securing the note takes place.  

Using a HELOC for the down payment on the second home might be an option, but lenders may require you to wait a few months post-closing on the multi-family before approving new loans.The BRRRR-style approach could work if you can renovate and refinance quickly, but make sure the timeline aligns with your lender’s requirements.

Repurpose the money into a variety of different options.