A buyer making a huge fuss about EMD is likely going to be a red flag in the seller's eyes.Best way would be to negotiate a smaller amount up front and then put the balance of the EMD down once you've gone through your DD.

Your remaining balances weren’t entirely clear on the two mortgages, they are really low rates, so instinct is not to refinance them, but sometimes it is worth it for the longer term vision.It also seems like you may be considering tapping your equity to replace your income, without knowing your age or long term goals, this doesn’t seem like a great idea on the surface.If you are interested in jumping into real estate full time to replace your income you should realize that is probably going to take 12-24 months.

What is the seller typically expecting to sell these for, considering that the UPB and legal balance are lower than the property value?

Balance.

The key is balancing cost with the value of your time—both approaches can work, depending on your priorities.

A balanced approach—leaving some 401(k) funds for diversification while allocating after-tax dollars to real estate—can optimize tax efficiency and meet retirement goals.This post does not create a CPA-Client relationship.

After 3 years of ownership, I typically see my buyers achieve 9-10% cash on cash return with an annual appreciation rate of 9-11% a year in those areas. 

Assuming you paid $430k, put down 10% ($43k) so have a loan balance around $387k and $100k in equity means it’s worth $487k.

It’s all about balance and what works best for you and your fiancé's lifestyle.

Someone tackling that type of development effort can achieve returns without ADU laws.