I even offered them a first mortgage on $700,000 worth of houses for collateral instead of cash.

Depending on your local lenders, this blanket or commonly referred to as a "cross collateral," loan is generally only offered by portfolio lenders or business/commercial banks. 

I am doing this as a series of loans, each with different collateral.

But I need to use some collateral from the rentals because im under water a bit on my home

connections to private money that can take my home equity as collateral?

The bank needs its collateral.

I owe about 80k on my current mortgage (cost me 578/month), cars are owned outright, one rental property is used as collateral for a 25k line of credit, another comercial rental property is owned by an llc of mine that is owner financed for like 280k (2200/month),  15k on discover card, 4k on another card, 4k and another card.Over half a million in assets counting all the properties and equipment in the businesses.What are your guys thoughts? 

They might be able to cross collateralize or have some other options.

Thats all well and good John, except in this case, the buyer is asking someone ELSE to lend them the $... and use that asset as collateral. 

Explain they will be getting a monthly check and their loan is collateralized by real property.