What I'm aiming for are turnkey rentals and trying to max out the amount of conventional, lower interest loans. again, the DTI income ratio will be IMPROVED if the property shows cash flow.

This can then be used as a negotiation chip in order to lower the price of the property.

The lower unit is a basement/guest suite.

I has two GREAT property managers that immediately come to mind, one handling 5 high end high rise condos I owned in Phoenix and the other one handling a 12 unit very lower end apartment building I owned in Arlington, Texas.  

That is lower than market and puts you in a cashflow-neutral situation, but it is unlikely your residents can afford that.

Risk entails everything from lawsuits to lack of diversity in investments to low rates of return to high exposure to vacancy (more units theoretically lowers vacancy exposure).

(Yes it still happens, but it is a lease violation, and we have a solid leg to stand on should we need to pursue eviction or collections later.)

You are generally going to either buy it at 95% of value or what is owed, which ever is lower. 

My question again stems around using seller financing to allow them to receive a consistent monthly pay of X amount and delay/lower their tax bill in the short term instead of going through a lender to borrow 800k+ causing my mortgage to be significant part of our income roughly 40-50% of take home -  which we are approved for LOL.

As already mentioned, you could sell via seller financing to lower AGI, as all you would have to claim is the payment income - until balloon payment received.Did know an investor that had 14 properties paid off and he moved into one every two years to then sell with the $250k single exemption.