If you are paying 10%, that's pretty high compared to conventional 30 year fix at 5.25%.

Get some more data in your system so you can actually see if its working(compare round to round).

So, I should stick with a traditional HELOC or do an interest only until I refi the property?

When comparing to deals in my areas, I would definitely say pass.

I am nervous and unsure as to how to approach it being that not only is this my first deal venture, but I also am not 100% sure how the seller finance process works legally and through documentation as opposed to a traditional home loan.

I would also check local rents around to see if it's comparable with the annual rent they claim to be getting. 

@David DavidsonA self-directed IRA operates the same, whether the IRA itself is SEP, Traditional, Roth, Inherited, etc. 

I’m doing it the traditional way with a mortgage.

Now, if I take a reasonable valuation of about $1.1m (the slightly smaller, less nicely renovated house literally two houses over sold for about $1m a year or two ago) and throw that into a mortgage calculator with 20% down and comparable taxes/insurance, I get about $4,500/mth.

Do this until you find at least 3 good ones and compare each of them every time you need financing.