It could be possible to still negotiate a purchase depending on the stage of foreclosure it is in. 

Even if it were possible to wait it out and do a "gotcha" at the end, that's just not how I want to treat anyone. 

I want to put the smallest possible down payment down with an FHA loan on a multi unit.

You definitely want to have the right insurance and make it as safe as possible IMO.

My though process in undercutting the bank by 1 % was to possibly attract qualified buyers.

I would prefer to sell the property vacant or the easiest less stressful way as possible, however I was advised that could deter investors buyers interest as the rental income is a one of my strong selling points.I am open and would appreciate any thoughts and/or suggestions from fellow agents or investors alike.Thanks in advance;)

Sounds like this could possibly be a Schedule C activity so keep self employment tax in mind.

Then my husbands aunt offered to sell us her place for this cheap, and I wanted to hop on it if at all possible so thats why I am here trying to figure this out lol

I want to get, at least, 5 properties over the next 2-3 years if possible.  

I've done a lot of research, looks like it should be possible.