Example , if a house worth say $200k and seller has mortgage balance remaining for $50k . is it illegal to sell that property with seller financing ?

Im just trying to finance this and know that with my taxable income its an issue, but looking at my assets the total properties are almost $2.5M and my debts are $429,000 on 2 mortgages + $70,000 or so remaining on my car.

When an asset is purchased and rent is collected from tenants, the remaining value after property expenses are paid is your cash flow.If you put down $50,000 to buy a rental for $200,000, your mortgage payment would be about $1,000 per month.

Have the real estate values gone down or remained fairly stable?

Your home will remain a liability even when you own it free and clear.

(I was surprised to see that they are not asking for anything at the time of the offer itself.)On both of my offers I put down 1% in escrow as an EMD, with the remaining due at the end of escrow.3.

Outside of light bulb changing that are easily in reach and he tenant is capable, I would have addressed the remaining issues.

Figure as a rule about 10-15 business days for a first-time loan and 5-7 days for a repeat loan should you remain in good standing. 

It's super useful for searching for properties that might have equity, but shouldn't be relied on when making a purchase.If you goal is to buy 2nds at trustee or sheriff sales you either need to find a good way to talk to borrowers into giving you their balance, get their balance illegally, or play the odds and know you are taking a risk the balance is much higher then your estimate (lender could have made advances, etc).Hope that helps.But then by guessing balance based on their first mortgage available publicly,  you won't know if the owner refinance, take the money out, and increase the remaining balance. 

Then they get x% split of any remaining cash.