To me at my current knowledge level, this deal only works if taking over the loan - to limit the out of pocket money to acquire the property since the outside reno and new septic would take up the bulk of rehab costs. 

@Mike ReynoldsRegarding your comment that if you need funds you can use money from your side business:You can't use non-retirement funds to pay for expenses related to real estate held inside you Solo 401k.Subject to the contribution rules and income limitations, you may be able to contribute non-retirement funds to your Solo 401k (e.g. as an employee or employer contribution) and then you could use the funds in your 401k to pay for expenses related to real estate owned by your Solo 401k.

RE is always changing and if you have only one niche then well your limited in opportunities and subject to the conditions that exist at the time for that strategy.  

You're not limited to FHA for this kind of loan. 

It seems like there are so many limitations to buying real estate with self-directed IRAs. 

This means that the bulk of the expenses are not going up annually.In addition, if OO you get to write off the property tax and interest to the SALT limit ($10K). 

We sent messages to all residents and 3 didn't answer, so it seems like that is the place to start, but does anyone have any ideas on how to figure this out given the limitations?

Lancaster city limits short term rentals to only certain zones of the city so definitely look at the city website for that information.

The agent was getting pushed pretty hard by his brokerage to get this signed before putting in an offer, so I caved, but limited the date. 

Exactly  its why I only respond to limited PM's.