Any debt on the property is paid off as part of the sale.

This eliminates the requirement for a new down payment since you are refinancing the existing debt.Lenders typically require:A copy of the owner-financing agreement.Proof of on-time payments (6–12 months).What to Do:Find lenders that offer rate-and-term refinancing for owner-financed properties (portfolio lenders and DSCR lenders often do this).Maintain a clean payment history.” 

We market the property as available now, meaning that it doesn't have to be repaired and/or it is vacant.

Based on personal experience, I would add assuring the lender is specifically authorized to perform an on-sight property inspection, at the lender's discretion / convenience. 

Quote from @Corey Gelineau: The inspection contingency is used to legally back out of a contract due to the property being in an unacceptable condition upon inspecting the property.

I have found that their sweet spot is after you have flipped 2 properties, as they have a number of programs (Zero Gravity, Double-Double, and standard) that can suit your deal and what you need at that time.Happy to help navigate it if you are needing some help breaking them down.Good luck!

Ideally, I would love to buy a multi-family property and rent it out, I would consider house hacking but I mainly want to my first property to be one that I can improve on and have it generate income for me.

It just helps... limit your liability to that property.

This type of property has the chance to cashflow, even highly leveraged, in a market where cashflowing properties are quite difficult to find.Could house hacking a property like this work while I am going to school? 

you mention ARV - what is the cost to repair the property to get it to that ARV?