What are my options and potential workarounds?

You could even offer a lease option for when they're back on their feet... get creative and generous!

Been thinking about taking on a personal loan of 50-70k for purchasing power in my Midwest market, the loan would just be for down payments and closing costs on sub 85k SFH / Duplex properties.

I would agree with @Michael Smythe - the only way a seller comes around to a sub to transaction is when they have no other options or are uninformed.

Ideally if we played the cards right we would have option to take some of the init you do  Equity out after adding value.Thanks for the help!

We may have some secured options on SFR flips in the $200K range! 

Keep your options open and decide what works best for you and, just as importantly, what strategy your particularly property will fit.

Am I missing out on other options? 

We have been discussing options on how to move forward.

If you log on to some of the popular sites like furnishedfinder or Airbnb you will see that they have "rent by the room" options.