What's more, the PM should have gone over when the unit was vacant to make sure it was secure (and lights and taps were turned off). 

He is securing expensive debt, not debt through a bank, isn't putting any capital into the deal and structuring the equity investment in a highly risky manner without any upside offered to the investor.

No problem with down payment but will need conventional load which is not a problem as I have been pre approved many times just did not find right property.

A little update with the bank, they are now telling me that they aren't even going to consider a settlement or a short sale unless the past due 14 contractual payments (around 8-10k) are paid.

Show the lease agreement, show his rent payment history, and show any written evidence from the tenant that he admits to being late/unpaid.

No, it was secured but apparently he used the same collateral for every loan he took out. 

BUT there have been 24 late payments with the last late payment made in Nov 2024 and  0 paid on time.

Looking ahead, once you secure a tenant, perhaps this is something that should be explored to make the next lease up easier.Also, @Caria Mitchell raised an interesting point in saying: We are experiencing a shortage of qualified applicants, I’ve noticed non-conventional applicants vs qualified applicants that don’t have a voucher or some form of subsidy. 

We have $400K into the property between Down Payment and Renovation.

I would highly recommend doing a renovation loan like the 203k or homestyle - you are able to leverage SO MUCH CASH for such a low down payment.