We generally don't negotiate on things like that with tenants (although, of course, we fix things that aren't working).

If the goal is to "just get it done," and there are residential realtors involved that think closing in 21 days matters (in the SFR world, it does), then this honestly may be the best route.A true commercial loan will have an interest rate on-par with a 30YF primary residence SFR rate, but rather than being a 30YF, it'll be fixed for 5-7 years, and then you have to pay the mortgage off entirely, most commonly by refinancing. 30 year amortization may still be in play.

What we have found is, most of the time they are leaving the house and yard in a condition that goes over the amount of their security deposit.

Also, selling off any lots up front is not part of equation because I've agreed to fix the subdivision road these are in. 

If he has few assets and or a large amount of liabilities I’d go no further.

There are others I found that will do them, but they have low max loan amounts around $250k, which didn’t work for what I wanted to do.  

there is literally no way this would only cost 16-20k to fix LOL. wishful thinking. i would call this a full gut based on the pics and use $65/sqft for guts (even that is sometimes not enough but it's a place to start). so if this property is 1,000 square feet, we're looking at a $65,000 reno give or take. what did your contractor say it would cost?

Ruling that offering buyers agents a guaranteed commission split was price fixing makes NO sense as this amount was always negotiable during the listing agreement negotiation.

What is my reserves amount that I need in case of unexpected capital expenditures?

If you were to renovate one side for one year while living there, then move into the other side and fix that one up over a year, after 2 years you'd have a fully renovated duplex at a very reasonable pace with a place to live the entire time.