I would suggest that you rent the property and consider using a property manager who can finance the improvements for you up front and be repaid out of the rent so you can have passive rental income over the long run. 

He might  consider  selling to you and saving some funds in his  bank and  using a reverse mortgage to  purchase the proeprty .   2)  for your side -if you need to keep the down payment low - using the  VA loan is a great idea ...already having a VA loan outstanding you might have an issue  using another VA loan . 

They decided to replace the carpet for the entire apartment and send me the bill instead of just using a carpet cleaning service.

In the application there is a question if you are using a loan towards any of the down payment or closing funds 

As mentioned above house hacking is a great way to get started since its low money down as your primary residence, but if you already own your own home you may look into tapping into your equity and using a HELOC to help with downpayment.

He was HIGHLY over-leveraged and using a product that doesn't even exist today.

I am using a FHA loan on my primary residence and don't want to refinance because we have a great interests rate. 

If you foul up and accidentally use an unlicensed vendor you could find yourself in some considerable financial trouble as well as having to redo all your work using a licensed company.

I have one rental property I purchased last year using a HELOC to start my investment journey.

There is also a chance to offset more tax liability by using a cost segregation on the rental property.