Are there any advantages to doing this (if it's even possible) / are there any disadvantages?

I also highly recommend you read as much as possible about your local municipal process and the laws in your state.  

However, I want to buy this house because it's a great deal, and I get the sense the sellers are just mad due to the fact that they agreed to the deal in the first place and are dragging their feet as long as possible to make me not to want to purchase.

I took the initiative to learn as much as I possibly could about the business, particularly small multi family buy and hold.

We are possibly looking to buy a duplex as investment rental property, live in one side and renting out the other side to supplement our retirement income.

Investing is definitely possible, and you don't need 40% down (nowhere near it) and triple-paned windows for dirt bikes. 

I left a the old power intact until the last possible moment. 

Hi and welcome to BP, Im also connecting here and there to find more connections to make my goal possible.

To make the numbers work with finance 25% down isn't possible for a lenders requirement.

My main focus is generating the most cash flow possible to support my (future) family solely from rental income, preferably sooner rather than later.