And there should be a couple of contingency hurdles that have to be passed before you can actually close. 

If you have generally good tenants who pay on time, that's the biggest hurdle.

There is a massive amount of new construction that is easy to aquire and virtually eliminates many of the hurdles you'll want to avoid, you should consider thisFlorida is a no income tax state, we are very landlord friendly, especially with a new bill the governor just signed for squatters, tourism and net migration are fantastic.

It's in Hawthorne, CA, which I believe is not under LA rent control, however raising it more than 10% a year seems unreasonable. 

In all our years doing this work, we've only seen it successfully completed a handful of times because of how many hurdles you have to jump over and through.  

The fact they are trying to change the lease as a whole is unreasonable, in addition to their requests.

More important is the equityMany people will overpay to get a home on seller financing then realize they overpaid and cannot refinance because a lender may want 20% equity which could be a tough hurdle to overcome in the future if prices stay stagnant and you have a balloon in say 5 years.

I'm sure there will be one person with a perfect scenario including an unreasonably low LTV that will disagree, but I don't believe your asking for what is the lowest they can go in a perfect situation, but rather what is a realistic rate you can expect in the future and 7% is a realistic low end. 

What are the hurdles to making this switch, if any?

In other words, should I wait to pursue a BRRRR project until I can qualify for the refinance or are there ways around this hurdle.