After that, the lender may use a private auctioneer to auction off the property and try to recoup as much money as possible.

The private property owner is responsible for maintenance on the private property.

Or how did you figure out the nuts and bolts of how to do private lending? 

Very few allow any subordinate financing below their note but I do have ONE that allows 90% CLTV (they loan 75% and allow you to secure a 15% seller carryback as long as you come in with 10%). 

I had found some regulations about VA guidelines and it speaks about recent separations and states that anyone who has recently seperated and doesn't have the needed 2 years job security can still be processed but underwrites will use their best judgement and will have flexibility.

Renovation work throughout both apartments, gutted and refinished the basement as well as extensive work in the private backyard.

The seller had a military contractor job with security clearance.

Private (hard) money might help with renovation but will be pricey.

If you can purchase this home with private money or seller financing and get a $110k loan, then you could do a rate/term refi right after so do a 90 or 120 day note to secure the property and get it in your name, then refi into long term debt using the full appraised value. 

Since you're 6-12 months away from buying, use this time to build investor relationships, master deal analysis, and secure financing.