is she trying to push me to make offer?

Sometimes the houses just sit which is an advantage to owning them free and clear, no monthly payment to worry about or push to get them rented.  

Talent can push rates up slightly, but I don't think for the bulk of development activities employers are going to pay a major premium relative to the value you can deliver because of a shortage of labor.  

We decided to go ahead and take advantage of the market and sell.

A master lease would definitely be a good option, although the seller would like to go ahead and sell it through owner financing and take advantage of the lower tax rate.

I will push on the sellers to vacate 1 unit at a minimum

Of course, there are no guarantees in the investment world but a 2% increase in the value of a typical say $800,000 Bay Area home (increases have of course exceeded that rate historically) is $16,000, which means that in a given year you would be ahead $16,000 - $1,500 (i.e. $125/month) + 12 months of principal paydown. 

You can push rent if you update everything, but that gets into a territory that you're trying to shy away from.  

It is a bit much and if you do not have a competent contractor, it will be a head ache.

The Key to getting ahead is getting started" - Mark Twain