They don't mind higher vacancy rates then SFH might be an option.  

With a 7% interest rate and high HOA fees, the key is evaluating if your skills and investments can generate higher returns elsewhere.

Key Factors for a Good Seller-Financed DealCash Flow: Rental income should exceed monthly payments (PITI) by at least 1.25–1.5x.Purchase Price: Compare to ARV and market value for fair pricing and equity potential.Interest Rate: Aim for competitive rates; higher rates must still allow positive cash flow.Amortization/Balloon Terms: Favor longer amortization and align balloon payments with your exit strategy.Down Payment: Lower upfront costs reduce risk but should meet the seller's expectations.Flexibility: Seek no prepayment penalties and fair late-payment clauses.Property Condition: Ensure the property’s condition matches terms through inspections.Seller Motivation: Assess the seller’s willingness to negotiate favorable terms.Exit Strategy: Have a clear plan for refinancing or payoff at term end.Portfolio Fit: Ensure the deal aligns with your financial goals and risk tolerance.Vetting multiple deals and consulting professionals is crucial to making sound decisions.

Depending on how it is done and what guarantees the government offers and requires of the released entities, interest rates could move slightly higher.

Keep in mind a HELOC rate will be much higher because of the CLTV and risk.

Id keep looking if it was not an approved short sale ( even an approved short sale takes a very very long time and theres no guarantee that you will even close on the house after months of waiting). q1)There are plenty of non traditional lenders that could offer you construction financing if the numbers make sense but it will cost you with points and a higher rate.

Increase the occupancy rate to 80% or higher over the next 12 monthsto increase the value.

Even if arguably their net could be higher listing it.

Also, you could consider buying something with "hard money"; this comes at a higher interest rate, but you might be able to get into a property and either flip it or refinance it.

While rates can be higher, they are efficient for temporary needs.2.