With my initial offer I had attempted to get the owner to pass a 30 day notice tp one of the tenants.

I would be straight with him and explain what your are trying to do, what would be the return and your exit strategist, best worse case scenariosNobody would pass a good deal. 

I'd make sure you pass a perc test first.

Need your COC or to pass a building inspection, lead inspection, grass cut, snow removed, tenants placed, properties managed etc...we do it all.We have clients from every corner of the world. 

Next I have to sign up and pass a written test downtown...

I’d probably move there myself if I could get everyone uprooted.If your friend is buying at $100K to get $1,000 in rents, from one of the many large turnkey operators that are selling to AUS citizens, then I’d pass, as they’ve already extracted most of the value from the deal.

also if the rooms don't have closets maybe it can pass as a Studio, dinning room, ?

He may require you to get a structural engineer into the project (or maybe not), but he should at least be able to tell you what you need to do to eventually pass a CO inspection.

You will also need to get fingerprinted and pass a background check, obtain errors and omissions insurance, find an employing broker to work for and pay a licensing fee with the state before being issued a license.

I would just make sure the $254k is conservative and below any other active property in the area.Even if it doesn't pass a 4-point inspection, you could still make it work depending on what needs to be replaced.