If I create a debt fund that offers 9% interest on first lien notes with a 5-7 year payout, would that be attractive to high net worth investors?

Quote from @Ben Fernandez: Make the offer that suits your assessments.

Once the sellers accept the offers.. 

Then offer the creditor a percentage of this amount as settlement in full.  

Large apartment complexes flooded the market with inventory and are offering crazy incentives and amenities that crush the small landlord which can make finding a tenant challenging and often for less than market rent. 

Financing can make a big difference, and local lenders who understand house hacking and multi-family investing can sometimes offer more flexibility than big banks.

I am simply trying to offer a solution that is fair to both parties that allows the property to stay in the family.The biggest problem is they are having trouble refinancing the property due to credit balances.

If possible, consider a duplex or single-family home with extra rooms instead, as they offer better appreciation and flexibility.

They sound very knowledgeable and I am interested in jumping into the customized course they offer. 

It sounds like the reverse mortgage company is offering a path for you to buy it - which is more than they have to do.