We have a family that is very interested just no offer yet due to bank issues.

Assuming the property does not have major issues such as deferred maintenance or lacks desirability, accepting anything less than 20% down, minimum, is asking for problems.  

The issue is that in those areas there is not many multifamily properties when compared to a larger city like Torrington or Winsted. 

Seemed to me that there may be legal issues with doing this, not to mention it just seems very unethical, and outrageous that someone would be willing to agree to a deal like that anyways on a $20-30k house.Any ideas on that strategy or how that would work?

(Paying it is an entirely other issue.  

There are others who maximize leverage, think that you can easily build a cap-ex fund over time (hint: cap-ex issues aren't linear), and don't insulate themselves.Side note: if the market doesn't go down then those highly leveraged investor with no cash sitting in a "wasted" reserve fund will get a higher ROI based on their capital allocation.  

A tenant could also burn your property down or a host of other issues.

This reply made my day.Off the top of my head, I am assuming the two concerns/issues one would have would be the set-back requirements (Not a big deal) and parking space requirements (Could be a big deal depending on the lot size.

An option must be for a stated period of time, try 99 years, lol.The issue isn't at the state level, it's federal and with the IRS, as well as CFPB then financing if you apply payments to any purchase price. 

I am having issues getting lenders on board with these Container Home duplexes that I have designed and have contracts on to buy already.