I have a seller-finaced duplex that I am negotiating currently. Sellers are generally good on mortgage/note terms, but are seeking more security. I am ok offering a purchase price slightly higher to compensate for the...

I look at long-term appreciation and San Diego has long term appreciation that exceeds inflation and most other locales going back more than 50 years.  

The remaining 16k is considered a "taxable gift", but you won't pay any gift tax since "taxable gifts" reduce your lifetime exclusion (approx 5.5 million indexed for inflation).You should make sure your CPA is aware of all the gift tax laws.

We do a mix of this now and keep some properties as rentals because they're growing in value, and rents rise with inflation. 

The project in the end was a success, the profit after fees and costs was $20k, but partly due to the market rising and the ARV went up $20k from what we thought it would sell for when we bought.

I know for example to stay out of cierco, but honestly from what I heard and what I see on the market Austin is starting to rise in value.

Since it is a reverse mtg, with no payments being made, the balance rises every month.

Equally the 54 properties will over time have increased rental and capital value and when mortgage balances are cleared the income will rise so you may need significantly less than you have calculated. 3) Would you recommend I start a business and pay myself out of that to protect my original flat that I own outright?

So I don't rise to the bait.  

Jd Martin good point about inflation - I like the idea of year 2000 dollars yielding year 2017 rewards...will give this some more thought.Also - apologies for the double post!