How can I structure this 8-unit multi-family deal?

[Mike Brown]

Hello! I'm engaged with the current owner of this property and I'm trying to figure out how I might structure this deal to land it. Feel free to ask questions and I'll do my best to answer them. The owner lives out-of-state and had not tried selling before I contacted him. I still have a lot of due diligence to do but I'm trying to also figure out the finances so if the DD says it's a good deal, I can pull the trigger.

This is my third deal. I have a duplex and I'm closing on a single-family this month. The goal for this property would be buy and hold for long-term rentals.

The property is located in South-Central Missouri close to a military installation. It's a total of 8 doors in two buildings on a single plot. One building has four 2 bed, 1 bath apartments. The other building has four 1 bed, 1 bath apartments. Both buildings are boarded up and have been vacant for at least 10 years according to the owner (older pic included below). The owner purchased the property in 2004 and still owes $100,000. Monthly payments are $820. Based on my Internet searches I think he purchased it for around $175k. I know I need comps. I think it could be worth $300k after rehab.

I gather the owner probably has several income streams and, instead of letting the bank foreclose on the property, he's continuing to begrudgingly make payments. The owner says both buildings probably need gut jobs. I haven't seen them inside yet but I'm betting so. I've been on the outside of each. They're on slabs. They're two stories each with cinder block walls.

Before I even do a walk-through, I think it will take about $100,000 to rehab.

There's a bit of room in the back of the plot that could possibly make a nice place for covered parking after it's cleared of brush and trees that might add additional value. The cost of this is not included in the $100k rehab estimate.

I think the 2/1 units can pull in $550 each and the 1/1 units can pull in $500 for $4,200 in gross rents per month.

I'm trying to figure out how to purchase and rehab these. I have $20k cash, $3k per month from my W-2 that I save that could go towards payments, and cash flow from my other properties of $1k per month. I have no home equity.

One big problem I see is that these might not be worth $100k as they stand today. Who will provide loans for an underwater property? And if the owner is still paying on time, will a bank even consider a short sale?