For a while, I was trying to start a business of running vacation rental properties but ran into financing issues as I had an extremely hard time trying to get sufficient capital to expand quickly. 

You just might have  sufficient funds to close? 

Generally i try and stay away from contracts and deal with straight purchases but given the condition of the house i do not have sufficient funding to buy the house outright.

I feel it is a great deal and I don't want to get beat out on my first deal because I didn't have a cash offer.If a HML requires a renovation, then would a new roof and AC added be sufficient to allow for the loan to go through? 

This requires a bit more planning to make sure you never term out of your commercial mortgage during a period of time when values are not favorable for a refinance like at the bottom of a market cycle.So with sufficient foresight and use of the pro's while minimizing the con's I side with commercial financing from a RE investor perspective, but for the newer aspiring investors I will side with conventional since its financing with training wheels that favor the borrower.

How did you go about getting a sufficient contract that can help me get started?

@Dana PowellIf you have home owner’s insurance and require roommates to get renter’s insurance that should be sufficient I believe.

Offer to upgrade the AC in exchange for a sufficient increase in rent to pay for it.

However, if He doesn't have sufficient income to qualify - there aren't any banks that will lend him the money. 

It is up to the Trustee to determine if your offer price is sufficient, that requires an appraisal, and the Trustee has to assure the court that they have not given you preferential treatment.