Im really not a fan of your plan, are you unable to borrow at a bank, the Commercial lender at a small community bank generally can close fast and at a low cost, I can do 6 mo ir 1 year Interest only at 4.5% on a 20 year amm, i need 20% down and fund fix up, but they would also do a loan based on ARV, and you put 20% of ARV down an they fund purchase and fix up.   

Once that is done, the bank will have it appraised and lend (usually) up to 75-80% of the appraised value.

You're not going to find any banks that will lend on the appraised value up front.

However Banks have state auditors to answer to and 20% down is required or if you have other assets to pledge, they might lend that 20% as well if you cross collateralize on another property.

Preferably a local bank or credit union.

There are plenty of ways to get started without traditional bank financing.

So I'm wondering if the seller financing would be better than the traditional bank option?

Seems to me that if the seller doesn't need the money they would potentially make a far better return on their investment by using seller financing vs putting it in the bank or investing it in mutual funds or stocks.

Stephen Anderson I found a property that is bank owned.

This deal is likely a bank loan if the loan amount if under $1M.