Also, if the arrangement was so great for the last house, why didn't they do it all over again? 

The biggest benefit of this arrangement was actually keeping track of the hours.

Which begs the question can closings be arranged so seller has lump sum payment in hand before closing on the 12plexes?

An attorney may add an extra layer of a trust in your setup if they feel it is warranted.A very important warning, based on my 20 years of seeing these types of arrangements: investors tend to take shortcuts in setting up these deals.

You can also just try visiting local real estate brokerages or arranging a buyers seminar with an agent and co-op the advertising funds for it.

Some investors are able to push the envelope by getting a higher than normal rent by utilizing a lease option arrangement, or by wrap around selling with a low or no down payment - to people willing to pay more because they want to own a home and do not qualify for institutional financing.BTW, the above enabled many families to obtain home ownership who would never have been able to. 

Moving into a more formal business arrangement with the expansion of another unit plus the ability to expand further down the road. 

At first glance I would appreciate any thoughts on this arrangement. 

If you are not living in it, and have a decent down payment, it is very posable you might be able to arrange private financing at 8-9% with a ballon set at a point when you can reasonably expect to obtain financing.Another considerations would be to look for a tax sale property.  

Loan aside you would be smart to have some form of legal arrangement in place to deal with the property going forward.