Quote from @Quinzel Waiters:There is so many times a seller will say it's worth this..

The seller needs to sell the property for a divorce settlement and initially did not want seller financing.

Instead of discussing the possibility of owner finance with sellers - what if I offered the opportunity to  JV where they are the equity partner?   

It is still a seller's market in many geographic locations, so you can ask potential buyers for an extended closing period and/or with options to extend the closing period. 

In CA (my market) the seller is required to make honest disclosure statement and you can collect for material non-disclosure.I suspect you already have learned that you need to check the status of all permits. 

You need to constantly hunt for deeply discounted properties, compete with experienced investors, and deal with unpredictable sellers and cash buyers.

I’m considering offering the seller 85K, the realtor 12k and then put in around 35K to get both up and down units rent ready(might be able to do it cheaper, especially since it’s likely a rental).

If you burn a seller, there's a 50% higher chance either he owns something else you're offering on or he knows the seller or his attorney knows the other attorney, broker knows about your past deal, etc.

Rather than me as the FSBO seller?

funds only go into interpleader after months of sitting in escrow. the court just does not hand the money to the seller either.. if not agreed upon the funds go to the state etc.