our biggest issue is the fact that we wont have 1-2 years of income generating on the property to prove to a bank that it does, in fact, generate an income.... what ideas do you guys have? 

If not you wont hear from them.

I recognize that is on me for buying the place when that was in there, I just think this is a really poor decision if even 30 of these condos hit the market at once, it is going to destroy property values.  

Needed to buy a house, initially intended to rent out rooms to friends but after having a roommate from hell I decided I didn't want someone destroying my home/investment.

I am concerned the appraisal wont be done correctly.

Low enough to the point where you wont be able to live off it until you get enough doors in your portfolio.  

Going through with the foreclosure would destroy so much for this family, and I'm determined to prevent that. 

BUT, if you use an FHA on a 3 family, you can collect rent and save faster for the next deal.If a house wont qualify for an FHA, that means it needs some work and most likely you can get a good deal.

It was totally destroyed and only the land is there to purchase.  

You will fix the property, get a bad tenant that will destroy the place, fix it up, new tenant, bad tenant, the cycle will repeat itself.