You can use Transactional funding to get a POF letter. 

I thought about doing a cash out refinance to invest in a new property with him but another idea crossed my mind: I could have him invest capital into my current properties by buying equity from me and I could then use that capital.  

have you spoken with the seller and discussed how you both want to make this transaction happen. you dont want the attorneys to win. so why doesnt he give you time so he can vacate the tenant and you can get the financing?

Often, agents will disclose "foundation needs work" or "tenant hasn't paid in 6 months" in the confidential realtor remarks that aren't necessarily disclosed in the public listing, and you can cross off those listings pretty quick if that's a problem you don't want to currently solve. 

Chris in CA  and with a current RE Broker license you May bring in up to 10 parties to a fractionlized DT / mortgage / note WITHOUT any PPM reg A reg D. the broker uses the CA real estate agencies disclosures for these transactions over 10 and yes you need to then move to some sort of PPM Reg A B C D or what have you.. this is HML i started in back in the early 80s every loan we made was fractionlized. 

Real estate has high transaction costs - most folks don't realize to buy or sell a property it costs about 10% of the sales price (6% commissions and 4% transaction fees).Real estate is susceptible to harsh weather - during hurricanes, floods and freezes you can have significant property damage.

Taking the equity (around $380k assuming $850k sales price less transactions costs of 6%) is awfully tempting.Or...any other ideas?

Will I still be able to do double close wholesale transactions if I become a real estate agent? 

@Trent Burns, I believe with any type of real estate transaction you need to disclose your license status.

These sellers are typically opposed to having a realtor on either side of the transaction, so I would recommend you do all your homework on the bakc end by looking the property up on the county website to search for liens (yes always do a lien search) when purchasing a property especially FSBO.