What's the benefit for the seller to sell via a off market vehicle?

Or a vengeful ex who keeps...remotely...shutting the lights off and blaring the tv/stereo.

When you look at creative financing in this light, you go beyond types of lenders, seller financing or cash purchases, the use of other assets.As mentioned, you do need to recognize seller's motivations, understand personal finance well enough that you can make informed suggestions.You can utilize just about any other asset, that has a determinable value, value must be found and agreed to in order to use it.I've used stocks, bonds, other real estate equities, personal property like boats, vehicles even an airplane have been used, accounts receivables, existing leases or new leases can be pledged or cashed in, annuities, judgments, inventory and a & of sales have been used in some of my deals.Anything of value, held now or to be received in the future, that is marketable can be a source for leveraging a transaction. 

(Problem)One month later....This past Tuesday, around 11:30pm, I realize there is a Fire Police vehicle parked at my neighbors house.

I used $5K for a door garage, $2K for carport per vehicle.

For a tear-down, unless the land is worth at least as much if not 20% more than your loan I'm skeptical any bank, Hard money lender or anyone will loan against it especially if you have no track record.I agree with @Jeff Burdick a tear down and new build is a lot to take on as your first deal.I think real estate is a great vehicle to build wealth but unless they are very low interest rate, you may want to get your student loans under control first.

Is that still the best vehicle to move my 401k into, if I want to invest it into a rental house IF I am going to be using the income from the house for my monthly living expenses? 

The use of a self-directed "Solo(k)" plan may be the correct vehicle for you, but you are right, you do need to have a sole proprietorship or LLC in which you (and potentially your spouse) are the only employee, that is throwing off earned income to you.

The biblical value of Pi is wrong, the world wasn't created in 7 days, evolution happened, and a few car loans for the fleet of vehicles needed to support the rapid growth of your plumbing business, because you just signed 3 new property management corporate accounts, are not crazy or stupid.The dogma may very well be that car loans are bad (and in general I agree with this!)

@Sam R.Lol, as much as it seems in my best interest to just sell the vehicle, every once in a while I like to get something for the lady and I.