This will give you minimum equity, so you don't have any wiggle room if the prices in your markets fall.

@Brian Jordan, it's a sad world where Sellers will let a lot of their property equity be frittered away by your promise of quick cash, even though you've told them in bold letters that you intend on making a HUGE PROFIT out of them, rather than sensibly request that you (having told them that you're also a Licensed Realtor) list it for them for normal commission only!

You mention the owner has paid $70k on the mortgage but that isn't a number that matters (since who knows what interest rate he's on or if he's made any extra payments), what matters is what the outstanding balance is on the mortgage and can you offer them a purchase price that is A) Fair to the owner, B) Helps them sell with some amount of equity and C) Gives you room that it financially makes sense.The numbers change based on if you want to flip it or rent it, making the question "does it make sense" different based on the direction you choose.In short, I have no idea how much I would offer...

I would definitely consider an ARM, especially if you feel you will have some equity after 3-5 years.

ARV and how much room do I have to rehab and capture some equity?

Anything over a 5% return (roughly, I realize more math is involved here) on your new investment would net you positive investment income.  

I'd like to take my home equity and move to either Kentucky or Tennesee ,and start my realestate empire, by using the house hack technique.

I know this requires more paperwork from the sellers position.

But on a positive note it can and will keep costs down..

We knew it would be cash positive, and that's about it.