What happens to the remaining debt if the 1st lienholder (or 3rd party bidder) takes back the property in the subsequent foreclosure? 

Conventional financing has very specific rules to follow and falsifying information on the application to get a better interest rate or to qualify and then subsequently closing on the property is a really big deal.There are loans out there that do not require seasoning of funds, would allow your friend the investor to not be on the loan (or be on the loan if he/she wants depending on credit), but it's not a conventional loan and the interest rates are not conventional interest rates.  

I'm not very familiar with the area, though I've heard Enterprise is where we should be looking.

It probably will continue to be fine until some enterprising tenant tells the utility that they are moving and then doesn't, and uses the utility on my dime.

@Jason Hill if you have no experience with fire properties it makes it hard to estimate repairs and subsequently wholesale. 

Note the front doors, and what the window down below implies too.People dropping $200k on ADUs aren't subsequently selling those homes for $200k more.

just because its real estate does not mean you don't have a business enterprise going.Investing in the right notes  is about as passive as I have seen in all the things I either do or have done... 

@Michael Lear if it was decommissioned and showed a subsequent liakne then it should be indemnified by whoever was paid to decommission it

Also great info on OZs via Enterprise https://www.enterprisecommunity.org/opportunity360

Given that I will be considered self-employed and will initially not have income (or at least not income that is steady or predictable), I will be having my parents co-sign the FHA loan to fulfill the income requirements.I clearly have sufficient capital to not only fund a 3.5% down investment, but to also make the subsequent mortgage payments.