For a first property, buying in your name with solid landlord insurance is the good starting point.

This also removes the FHA’s mortgage insurance premium (MIP) requirement, reducing monthly expenses.Owner-Occupied Financing: If your next property will also be owner-occupied (e.g., a duplex or multifamily), you may qualify for a conventional loan with as little as 3%-5% down.HELOC or Cash-Out Refinance: Use the equity you’ve built in your current property to secure a Home Equity Line of Credit (HELOC) or cash-out refinance.

He did all the rehab in the beginning when he bought the house, that's why its now in a stable cash flow condition. 

Its generally retail medical operators, so we include things like the market dynamics for our use and why statistically the market and location of the site will be viable form a business case standpoint, and speak to how the startup has enlisted the help of an EMR or other such consultant to help in their general rampup and ability to bill/get insurance contracts.  

I understand this is my responsibility and I filed an insurance claim and the garage is currently being rebuilt as the entire thing was destroyed.

Some lenders may also want to see law and ordinance coverage in your insurance and perhaps a rebuild letter from the city stating that the property could be rebuilt as a residential 4plex if destroyed. 

no rent coming in but expenses were low - just utilities and insurance. 

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

We don't have the Midwest weather, high property tax, old homes, high insurance, high maintenance, or state income tax.

No mortgage payments have been  made by borrower since Oct 2015,  Bank is paying taxes and insurance at the sum of 15k a year, been in foreclosure for about 9 months, property is just under fair condition, owners are dodging the paper processors.