or setting up equal and substantial payments allowed by the IRS to make my mortgage payments.

Because you have a decent amount of cash on hand, my recommendation would be to find a distressed property with good potential for forced appreciation, put 20% down on the property and finance the remainder with a conventional loan, leaving a substantial rehab budget.

If you have owned the property for a very long time and taken a substantial depreciation over the time of ownership, you will have to pay a recapture tax assuming the property is sold for more than the net book value.

If they have pets get a substantial security deposit. 

If the contract at this point has lapsed then raise the price substantially and tell the buyer he can take it or leave it.  

@Joe VilleneuveI agree.I have the money for the down payment, but not sure I will be able to finance the rest with me leaving my w2 and still not having 2 years of substantial income for my business.

Unfortunately since they are renting with you with the garage included this is a substantial reduction in amenities. 

If you substantially renovate a unit you can claim a hardship and use the cost of renovations to raise rents.

Duplex 1 and 2 sound substantially similar.

I do not wish to be insensitive, but there is a substantial monthly rent in question, and I am not entirely comfortable with her tardy and somewhat evasive responses.