This is currently the track we're on which wouldn't be possible if we saddled ourselves with a fat mortgage payment not to mention having to save for the down payment.

Honestly, doing the math based upon my didactic background in business finance, there is no way I can take over the notes he has on the place (his suggestion to avoid banks and inspectors), cover operational costs (variable and fixed), maintain the known issues and repair the (recently) discovered issues without being either behind every month on the loan or going belly up.

I plan to do this because I have a very strong and stable W2 income stream where I can stomach the expenses if tenant goes belly up.

A big fat W-2 will help you get good loans for your first few deals, and also you can always house hack.

This is something I call "The fat cat syndrome".

You've got a belly full of fire, and that's gonna power you as you begin on this journey. 

You said that his business is belly up.

Pigs get fat, Hogs get Slaughtered"  - This is true over and over again, so when you meet a Hog, don't worry, his or her day of reckoning will come.  

I was trying to when I fat fingered it and hit post. :-)But in AZ there seems to be additional effort or cost associated with signing a warranty deed vs a quitclaim deed.

I have a 25 ft fat Max one in every vehicle I own.