If they will be turning around and renting it our, then they would get a Rental Dwelling/Landlord policy.The seller should be added as an additional insured as they still are tied to the property and could be named in a lawsuit. 

Multi family is extremely hot as well, we aren't currently keeping up with the demand for rentals or homes because of the increase in jobs and people relocating here.

If the seller is willing to negotiate, maybe go look at it then.

We don't know what these houses are really worth and what the demand will be after such a disaster.

They might do it free for you if you're a good customer, they might charge 1%, they might demand a full 6%.  

@Dan Cho - just to make sure I understand, if you put the 30% down (172.5k) from your HELOC, the seller will finance the remaining balance of 402.5k? 

At this point the seller is distraught as they believe their house is worth more (probably is, but nothing I can do).  

If the seller is even mildly agreeable, what would be the best way to propose this? 

The assignment ‘fee’ may be shown on the HUD1 (where both buyer and seller sign).

The assignment ‘fee’ may be shown on the HUD1 (where both buyer and seller sign).