Also, I am decently skilled at home restoration. 

It's called a one time restoration

The owner of that property in question cannot restore his full VA entitlement until such time as the VA loan is paid off in full.Further, even if you gave him the 3.5% down on FHA, his DTI will still be hit with the payment on that VA loan, almost certainly killing his next home purchase before it even gets going.And if he gives up on homeownership, all the future potential landlords are going to see that mortgage on his credit, and likely consider him unqualified for the rental unit.Unless someone is going to write a check to pay that VA loan off in full, this is a predatory activity and the victim is the owner of the home in question, given his goals and the proposal on the table.Do the right thing.

I'm involved in the program restoring some of these properties once they have gone through the process. 

I see from LA RSO guideline documents that "The rent level on a rental unit, after the family member or resident manager terminatesoccupancy, shall be restored to the rent level prior to the eviction, plus any automatic increasesthat are due.

City Fire department will have the information of the property and will determine the restoration process - rebuild or restore2.

We plan on moving in for the restore.

You could hire a fire restoration company to give you an estimate of how bad it wa and how bad it is.

This is in a small town that I own and operate other rentals.I am a bit nervous of the type of renters that are in these deferred maint properties currently but see big upside if properties are restored, Partialy because all are within 1/10mile and many property boundaries touching the community college. 

Completely renovated from the ground up in 2016, this home boasts fully restored original heart of pine floors.