Of which both sides will be renovated and ready for tenants in the next few months.We're ready for our next property and would like to do one more hack before buying pure investment from the onset.I don't want to kill our cash cow, but I can't ignore the fact that selling at a peak could put us in a position to grow our cash cow heard.What are your thoughts?

After you're done with that you can always buy a single family to start a family in if you need to.I think it's the best strategy to get started and make a big change in your financial position!

You don't want to be in that position. 

Positive previous landplord reference.4.

The rent doesn't meet the 1% rule but the potential for positive cash flow is there. 

After running numbers i'm looking at around $780/month in positive cash flow .The seller owns these properties free and clear and wants 5% interest and for me to pay any transfer/closing costs, i'm estimating $1,500.My question is, how do you pay down principal on a deal like this?  

Consult with a knowledgelable agent in your market to see if they have a positive or negative affect on your property value. 

The rent does not cover the mortgage, not even close, so subject to isn’t in question.Without much equity I’m assuming I should not pursue and tread lightly w/o further damaging the position the landlord is in?

Well there's the law, and there's putting yourself in his position.

Your friend/relative will be 1st position lien holder.