They supposedly bought the house from a motivated seller and are selling it to motivated buyer, more or less breaking even (so it appreciated at least 6% to cover broker commission is my guess). 

Ideally you want to get to the point with your buy and hold operation where you have enough surplus cash flow coming in each month where you can cover a line of credit for your properties.

Not only do brokers have the right connections to get the site in front of the desired Tenant, but negotiating a deal with a national can be tricky and without proper representation you could be getting a raw deal.

A tenant in one of my duplexes moved out under the cover of darkness late June.

some credit unions will do 100%, but at a high enough rate to cover their exposure. how did fha close it with a bad roof?

It does turn a profit and it does cover itself, but not enough. 

Lima capital one for example covers 90% of purchase and rehab costs, max loan to ARV is 70%.

Basically two people in charge of selling can get difficult, so you want to cover yourself if things don’t go as expected.

Value can increase via no rent increases if the industry is going through cap rate compression (dropping cap rate will raise value price).5 yr term baloon is almost always killer as in this case.  7 yr better, 10 yr is best.The todo in seller financed deals:- Increase value via increased NOI and hopefully enjoy free increases from industry cap rate compressoin so that when you apply for refinancing, the appraisal will come back so that the LTV being offered (70%, 75% maybe 80%) will cover the balance on the sellers note. 

What kinds of insurance riders will I need on the additional properties to cover the additional rentals/tenants?