The logic behind this is establishing some "science" behind how many prospects we need while simultaneously being objective about there ability to commit.

Yes you can if you don't tell your lender what you'll use the money for.Hope you know very well your friend and have great confidence in his ability to deliver on his promise for a 20% return.

Then it can also lower your housing costs, which gives you the ability to save more money for future investments.

As mentioned above there are several things to the seller financing part....and to me, having a seller that has the ability to do what you are asking and then actually understands what you are asking will be very critical to it working.

Other wise you get into a situation where a partial payment will delay your ability to start foreclosure.

The boards also have the ability to limit the number of LTR in a complex.

Don't discount what you have in place and question your ability to duplicate it.2.

This just means that 75% of the rents of all units (all 3 or all 4 of the units) must be equal to or greater than your entire monthly payment to ensure FHA will be sufficient should anything happen to your ability to pay for this property (if they take it back the property as a foreclosure/REO).In more expensive west or east coast markets it will be hard to make the FHA SS rule right now given that the rates are in the 6-7% range so I would recommend targeting 1-2 unit FHA properties. 

Electricity just ask for a bill.  

What makes real estate so great is the ability to leverage and no lender will want to touch these properties unless charge you a huge origination fee.