As far as what will work out is up to you. 

There is a monthly in person BP event, an event called pints and properties, a triangle deal makers session, NCREIA, and Triangle Real Estate Investors Association (TREIA) that meet in and around the Raleigh area. 

Sellers motivation shouldn't factor in what you can afford, thats a bonus if they will negotiate, but your numbers have to make sense to you and work out for multiple exit strategies (str, ltr, sell etc)Running the purchase numbers is pretty straightforward, use almost any online mortgage calculator, make sure you know taxes and insurance (taxes will go up a bit if it is currently owner occupied and you don't plan to live in it) Once you know your mortgage amount then start looking at other STR's in the same area and same size/amenities and see what they are getting per night and how many nights a month they are rented to calculate what you MAY be able to get.

Release guarantee if the tenant you place doesn't work out, let's say in the first 90 days and maybe 1/2 price for the first 180 days.

If you find a property and the numbers work out, then buy it. 

I suppose you could work out a plan with the tenants to do a more gradual increase of the rent rather than doing it all at once to be more income-friendly and to allow them to attempt to budget for the increase but you may also risk losing them anyway. 

It sounds like if you just structured it giving him commissions it would not really work out considering he clearly wants more involvement/skin in the game on the project.Maybe just split it LLC 50/50 and the commission savings is a preferred return over his split on the exit?

I am trying to work out any of the objections as to why I should not do this!

I don't have a company to recommend yet, (Still in progress) but if they work out then I will comment further.

Don't wait for the perfect property, it the numbers work out then buy it!