I would stay away from section 8, pull credit and background, and call referrals, and look at pay stubs for everyone who applies.

Plus, if you aren't able to get approved with what you've got now in terms of savings, credit, etc. you can learn on what you need to qualify so you know what to be working towards. 

the claim that you fixed their credit or helped their credit just is hollow. once in foreclosure their credit is trashed.. going to sale does not hurt it any more or less..

Here is a list of why adding ADUs in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

Your son is responsible for making payments on time or ruining this seller's credit. 

They did poor due diligence and a poor business model.  

With the exception of building a trailer on the property (these are hard to finance), this sounds like a good plan AND if you are using it for your business AND your business pays more than 50% of the rent (if you have more than 1 tenant), then this is a more financeable property in the eyes of banks and credit unions as it would be consider a commercial "owner-occupied" property. 

(May also cut significantly into the current cash flow on it)I know you mentioned not doing a HELOC on my primary, but wouldn't it be advantageous to have the ability to pay off the line of credit instead of be stuck in a payment that is much higher? 

My company offers fast-closing, no credit/bad credit loan packages in 44 states and referrals in the other 6.

But at a $1.5M asking price, as long as you don't have to spend more than $300k in rehab (without raising rents), this is a slam dunk deal that should easily be financed  at 75% LTV by a "investment real estate-friendly" bank/credit union that is located fairly close to the properties.