The seller is willing to finance 50% of the cost and defer payments for 5 years.

He might  consider  selling to you and saving some funds in his  bank and  using a reverse mortgage to  purchase the proeprty .   2)  for your side -if you need to keep the down payment low - using the  VA loan is a great idea ...already having a VA loan outstanding you might have an issue  using another VA loan . 

Instead of denying them, can we refer them directly over to the owner for them to sign a lease with the owner who is willing to effectively manage the contract, payment and relationship BUT would still want to retain us (albeit for a lower fee) to deliver ONLY guest and property care activities (guest communications, organizing cleaning, lawn and pool care etc). 

They also have monthly mortgage insurance on the payment. 

You're really just talking about a deed of trust (or mortgage, not sure which is used in KS) and a promissory note.

When you mention $750 - $1,000 over the standard monthly costs, are you only factoring in the mortgage payment or also factoring in repair / capex / vacancy reserves?

The relative had a living trust and will granting family control should anything happen to her.We notified the mortgage company and they won't accept the trust documents as valid proof of ownership and are demanding that we get a probate document, a quitclaim or grant deed showing the title granting out. 

I know debt isn’t necessarily bad as long as you’re making enough from the investment to cover payments.

The average down payment on seller financing is 25%.

Reach out to a lender who can do Hard Money/Private Money (I can do this if you are having issues finding someone you trust).