We are both 28 years old with zero experience prior to getting involved, she works for the business now and I work Blue Collar in the trades. 

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved). 

Real estate is transactional where people are involved so it won't be a black and white answer.The best to do is to find an agent that fits your needs and guide you through the process.

Should I go through with taking ownership of the property and try to salvage it for profit or do I refrain from even involving myself in the situation as it may cost more than it's worth to save it?

These are great for experienced flippers who can handle the tight timelines and costs.Private investing usually involves individuals funding your deal, like friends, family, or networking connections.

Investing in single-family residence fix-and-flip projects in New York involves purchasing distressed or undervalued single-family homes, renovating them, and selling them at a profit.

it was an interesting process but basically, the novation allowed us to get the deal done without having to involve the banks. this was a huge motivation. that way I save on having to close twice. 

Quote from @Garry Lawrence: I need advice on a serious situation involving a property I’m about to buy.

As you probably read through the comments on this thread, there are many moving pieces, costs, and folks involved in this transaction. 

HOA management for a bunch of peripherally involved out-of-town investors is probably a great opportunity pass along overpriced contracts to your local buddies.