Use $2,000 as a down payment on a mobile home that needs work, another $2,000 for repairs and remodel, and the $1,000 for carrying costs and incidentals.  

Several FSBO but no mention that they would carry a contract.  

You could consider getting 10% down to the bank and having the seller carry a 10% second mortgage.

Another option would be to see if the seller would be willing to carry the financing, allowing you to purchase the property and provide them with steady monthly income instead of one lump sum of cash (on which they would pay heavy taxes).There are also other options you can find in Brandon Turner's book Investing in Real Estate with No and Low Money Down.

Personally I carry a liability policy for each property then have umbrella insurance for added protection.

The Points and Interest rate are just methods of pricing the money they are selling the REI.Loans are what you carry for a period of time...maybe forever.

Three 4-plexes on three separate tax parcels and a seller willing to carry a note on 2 of the 3 buildings.

While commercial financing would carry a higher interest rate, being able to cash flow an additional unit would more than make up the difference.

You can use it in invest and hold scenarios to carry the property until you can get traditional financing however the interest rate will eat all of your cash flow if the deal is not strong enough, and if you don't get financed in a year, you'll lose the property (Plus from what I've heard from talking to a lender, you'll need 20-30% of your own money in the deal, plus a few points).

If fixtures are not used the p-traps will not carry any water allowing sewer gas to pass through.