At this stage I would keep things simple. 

We are in the very beginning stages of our careers and we don’t foresee having the time to do all the research.

Seriously, at this stage in the market.

The new house is in a very good neighborhood, and I need to act fast while its still under the owner-occupied stage.

It's just for show, as far as these guys are concerned, the money belongs to the rich co-workerSo it all depends on your personal situation.It's funny that the bank made all this fuss during the qualifying stage, but at the closing, they don't check or care to see where the funds came from.

If separate, then what are the costs to get to beginning stage of building?

I am in the beginning stages of this process and I am currently reading the Ultimate Beginner's Guide. 

Since its my first deal I fear buying at the wrong time, though I know if the numbers make sense then that would take away most of the risk.I have a real estate investment book (by David Lindahl) that describes there being a various amount of phases: sellers market, sellers market stage two, buyers market stage one & two.

My main concern though is, is it even possible/wise to strike a deal for owner financing when a home is in the beginning stages of foreclosure?

Spend the next stage of your life living conservatively and saving every dime for investing and for a reserve fund.