You can face legal issues because of the existing mortgage/loan.The other options are Contract for deed and Wraparound mortgage.

If you're going to buy it from the seller subject to the existing mortgage then yes, you need the correct Subto documents. 

New construction has a a LOT more gotcha's for the inexperienced buyer then if buying an existing house.

I would think about what asset you would want to buy and whether a good number of those exist in your local area.

Plan is to wall it off and convert to a 4br/2ba,  update existing bath and kitchen, new floors,  interior and exterior  paint.

@Ivan Terrero no you can’t do that; you can however allow an authorized user to in a sense ‘borrow’ your existing credit history which will report as theirs, but you can’t outright sell it to them.

Also look into “subject to” deals, which involve taking over the seller’s existing mortgage.

I am also negotiating a "Subject to" property with one of my existing clients.If you can get legs on the PM company (get to 200 to 300 units quickly), you should be able to have enough cash flow to be able to fund your purchases.If I were to do anything over, I would have quit my engineering job sooner and started in property management.  

It's pretty much a war zone there and I've had to communicate mostly by e-mail and text as cell service is about non-existent, and all the roads are closed so there's no driving over there and no gas even if you did get there. 

Learn how to to screen and select a quality property manager that won't cheat you or mismanage your property (they do exist).