The down payment to acquire this sub to is $25,000. so you give them $25k, you take over a $70k mortgage and they are going to pay $165k in a few years - if you will not do this deal send it to me I will do it. 

I would generally agree with the other posts from @Jonathan Greene, @Drew Sygit, and @Danny Gonzalez, and @Caleb Brown, but something I think would be helpful for you would be to share the profile of a type of property, price point, and the amount of rehab you're willing to do (given your mention of S8 properties) that you are interested in acquiring.

Acquiring multifamily buy/hold rentals to establish cash flow as passive income. (1 within the next year, 2 more the next year, 4 more the next year) Find my capacity to hold and manage before relying on property management.4.

Now that that’s done I am looking into use the rest of the funds at a foreclosure auction to acquire my first investment property.

If you find some good deals you could use debt to acquire more doors to get you to your cash flow number faster (your option 2).

Thanks River, I'm acquiring using creative finance, but i plan to remodel a bit, then keep this as a LTR

Definitely there is a lot of opportunity for him to learn a lot from this property if he is receptive to acquiring the knowledge.  

Hi community, I'm in the process of acquiring my first STR property in Joshua Tree and have met with a co-host that I really liked.

Quote from @Stuart Udis: The Philadelphia Housing Authority (PHA) recently acquired a 360 unit 12 story multi-family building for $24M and  a local news outlet  reported on the building.  

You left out information that maybe relevant such as taxes/insurance per year, maintenance cost anticipated per year... plus other expenses depending on rental such as management fee(if you aren't manager), advertising cost to acquire renters, etc....