The balance needs to be paid by 5/31 before it goes in foreclosure.

Hi - typically Mixed Use properties are going to require a traditional commercial real estate loan from a bank, small balance commercial private lender or for the larger ones a CMBS style loan.However, a newer "DSCR Loan" product for Mixed Use is making a comeback - which is a really great option for smaller properties/more beginner investors since it has all the same trappings as a residential DSCR Loan (30-year fixed, easy qualification, straightforward process) for a property with commercial units.Generally going to be limited to 8 units max and has to be primarily residential in every way (majority residential by units, square footage and rents) but if it fits all that, its a great option

Defining your goals will help determine the best strategy and ensure it aligns with your current means and long-term plans.By taking these steps, you can balance your ambitions with your responsibilities, reducing risk while building a successful investment portfolio.

You would likely use the proceeds to pay off the HML, leaving you with a new mortgage (which you paid to get) and a HELOC payment (and possibly a residual balance with the HML). 

My plan is to assume what his balance is as a subject to and possibly paying cash over as a seller finance and meet the payments by tenants that are in place.

You'll have to balance cost vs features!

The bank also wanted the church to maintain “compensating balances” in their checking account.We had an existing $650,000 mortgage secured by the property, which had been paid down to $615,000.  

There's a difference, and that difference is how they benchmark cost of funds and interest rate risk from a balance sheet capital perspective. 

. - Lenders are not balance sheet lenders.

See below for the numbers:Home Market Value: ~525kLoan Balance: ~476kEquity: ~50kMortgage Payment: $2570Rent Price: $2650Property Manager: 10% (potentially 7% w/military discount from a referral I got)Cashflow: $-185/month, $-2,220/yr1st year Equity Payoff from tenant: $11,561It's a 4 bed, 3.5 bath home built in 2011 that only requires some new paint to be rent ready.