No you do not need to pay the cost and you simply put in your offer without any reference to a payment to the sellers agent.

My personal finances are in a decent shape; minimal debt and some money saved (not enough to cash buy or put down a high down payment),  My question is, should I use a HELOC  and use that to help leverage another deal or would it be best to rent the property and after 6 months claim that as income for another loan? 

I believe for your first investment property you should look into using the Master Lease Option method, it has the least amount of risks as there is no down payment and and you can essentially "test drive" the property before deciding whether or not to buy it.

Appreciated real estate can be refinanced to pull out equity for down payments on additional real estate purchases.

Am I completely reliant upon the seller to make the loan payments on the original note?

You can technically begin the process as soon as the payment is late (after any grace period).

On something like this for 300k this is small, hence probably buy it.Like others have said it also matters how long you want to keep it. 70/month for the life of your mortgage of 360 payments would be 25k

My question is, since I have to live in the unit for a year, what if I get a great deal, can I use the equity to use as a down payment for another unit?

In addition to keeping the down payment will you be able to assess fees for the time and expense of him defaulting?

We do not have much in savings for a down payment, however, our friends agreed to sell us the house for well under market value.