In terms of your two questions:Thoughts on the two products - I like the LOC, as you can use those funds to acquire other properties quickly without having to wait 30 days to line up financing.  

The whole thing:As I get more and more comfortable with the SFR and Small MF properties I currently own, and the ones I'm working to acquire right now, I keep looking forward to what comes next.

They have great PM but they don't take on properties that you don't acquire from them anymore.

My wife and are trying to acquire our second rental property currently.

I just began the process of acquiring my real estate license and me I'm looking at different avenues to take within real estate.

The current business plan I am developing follows the path of one found on a BP podcast, describing a the 3 year plan by acquiring 5, 10, & 15 units over that timeline. 

I have a vision for myself buying and holding multi-family properties (preferably 4-plexes) in the central Kentucky/northern Kentucky areas, using cash flows to reinvest and acquire more.

I know if have the option to walk away, but does anyone have any other ideas of how to solve the seller's problem while still acquiring the property for a fair price?

Eventually we would like to expand and acquire more homes, preferably in the same city as the first purchase.

So, let me just state this generally ...You might be a bit pressed to find a single investment property which will net you $1,000+ a month after expenses and debt service, if I understand your post.Remember also that you will be paying taxes, insurance and upkeep on the home you acquire from your family member.