I don't qualify for both mortgages so the traditional thing to do would be to offer to buy this new one with the contingency that I need to sell my old home first.

@Ching Yang, If you reword everything in terms of "act of service", you will be looked upon differently.Wholesalers enable quicker access to capital through a network of buyers to motivated sellers, without having to fix up the houses, that traditional MLS or retail buyers cannot provide.

I would like to see if I can get it for 5k down but I am stuck about approaching him on a 5-7 year balloon/ 30 yr. amortization and refinancing the property in 5 years traditionally or seeing if he will do no balloon with a 30 yr. amortization.

Besides, most foreclosures won't qualify for traditional bank financing anyway.

Their role is to fix the item on the service ticket they are sent.

Again, This is just one way I look at capital improvement items.

I doubt this happens very often but requiring them gone for the inspection opens the door to claims of missing/broken items.  

We're a little over 2 years into this project and are now working on exterior items like new siding and gutters, painting stairwells and hallways, etc. 

That's a big plus for a seller being that you do not have to worry about renegotiating a contract if the property does not appraise or if the buyer asks for inspection items to be fixed.

Then once the property is stabilized with new rent roll you can move towards refinancing into traditional options.