Perhaps we "buy" the house from them for the $328K balance to satisfy the lender and don't need a large down payment and then have a separate contract with them to pay $x per month until we've paid the full $172K amount.

Many banks securitize their loans (bundle them together) and sell the loans to Fannie Mae or Freddie Mac, while continuing to service the loans, that is collect your payment.

The deduction is optimized as values increase and can potentially offset the entire net investment (including down payment) for high wage earners.

Hey @Dalton Foote - I highly suggest  using a renovation loan and house hacking a multi-family if that is possible with your current life circumstances.The 203k and homestyle renovation loans are just amazing products and drastically help you reduce your risk, in my opinion, because you are able to leverage the cost of the entire renovation with such a low down payment loan.We work with a lot of clients who use these products in Chicago, and no matter what, in the long term, they gain great equity.If you aren't able to house hack - the process is essentially the same, but just with more money down with hard money or conventional construction loan.

Seller financing: Note for $1,350,000.00  - 7% amortized over 30 years with balloon payment after 7 years, interest only. ( I am trying to get the first year at 6% to stabilize then go to 7% remaining 6 years)Property Condition: Above average.

I think it was for down payment and closing costs.

If you want to put down a low down payment, you might not cash flow for a few years.And FHA for 3-4 units is almost impossible.

And doing 3-4 units FHA is tough unless you have a huge down payment. 

With the upswing in the country's short-term and mid-term rental markets, a unique opportunity is presenting itself to house hackers during a time when it's harder to cash flow than it was a few years ago.

Don't change jobs or income yet.Once you do and you think you can manage the payments based on your new income, maybe once you get the rooms rented.Then if you want to switch there are plenty of opportunities.