(Like Today) I am working on a fixer upper using a 203K loan.

I'm at the point where I realize that my body can't handle this kind of labor (50-80 hrs wk) for another twenty years and have always had an interest in real estate.

I'm not sure how you would approach your friend to buy their property, but in terms of financing, you could always try for a conventional loan program (lesser property requirements, so you could swing a fixer upper pending how extensive the repairs needed are).

We have spoken to one of the previous owners who advised that there is an unfinished upper area (somewhat described as an attic) that could potentially be turned into a 5th unit if one desired (apparently the hook-ups for water and everything needed to make it into a sep unit is there but was never done).

The upper unit (2nd and 3rd floor) is approx 1500sqft and the lower unit (ground floor) is approx. 1000sqft. 

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get a foreclosure, if you doing the work yourself, you'll have an upper hand on the competition cause your margins will be higher.  

There's quite a few cash-flowing buildings in the southern parts of SF/Upper Peninsula under $1.5m. 

I'm looking at a fixer-upper sitting on 21 acres in a hot area just outside of my city.

We also have a newborn and would like to remain in our current home with her at least for the next few years.I'm willing to get creative, willing to get my hands dirty (as in demo/construction, not burying bodies...).