I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.

@Bruce Ng unfortunately, a lender isn't incentivized to complete this process quickly, so it's probably on the back burner-- they'd rather get a new loan at today's interest rate rather than let you keep a lower rate from the past. 

Along with what @John Litz is saying, doing a 1031 exchange on the lower performing properties to buy in areas with more growth potential, would give you that diverse potential for greater cash flow.  

The Seller is interested in leaving up to $0.5m as a preferred equity/debt as long as she doesn't have to pay tax immediately on the $0.5m that she doesn't receive on closing. 

You’re able to learn the basics of a real estate investment with lower risk and build equity at the same time.

So I calculated an example. 20% of 352K is $70400 but there's also closing costs.

That is, sometimes an agent and seller with lower the fee to the agent when the property is tough to sell.This is a strong list but it is not exhaustive.

Lower Initial Costs : Buying a fixer-upper can be more affordable than starting from scratch.

You could look at some of your close competitors who have already done this type of renovation and find out what kind of rent they are getting.

Initially, we plan to invest in lower-risk opportunities such as arbitrage to gain a better understanding of the market.