The issues we ran into were being pre-approved for a mortgage much lower than what most houses in our area are selling for, and finding houses that were in our price range did not qualify for conventional mortgages.

Also try real estate agents .Honestly raise your asking price , you can always go down 

I would ask insurance companies to price your policy with and without a gym. 

Any input would be greatly appreciated. there's a lot of ways like petitioning, confidential sale price, buying other assets to offset and depreciating them in year one, etc. but the main way I would do it is to invest in ground up developments with tax abatements which pushes even higher cash flow and then to keep them as retained earnings or in a non taxable structure depending on your equity position.

Purchase price is $60K and estimated ARV is potentially 200-300K.

I don’t have a crystal ball and neither does anyone else, so we don’t know where rates or home prices will be exactly.

Therefore, the building should be purchased in an LLC, where everyone is a partner, and you can then buy them out at an agreed price. 

If the seller had some basic understanding of financing, they would realize why they should not accept it without substantially raising the selling price.

Pay them fairly and they'll keep delivering opportunities to you.

I’m in contract to buy a property that has a new 2019 tax assessed value above purchase price.