It sounds like you bought a great multi-family building that just needs some issues taken care of, which is quite normal when landlords sell with tenants in place... 

He normally just manages the job site and handles customer calls. 

I've been narrowing down new cities that I'd like to invest in with a group of people and we've been going the normal route of collecting data through government sites but it's time consuming. 

I get much more cash flow when I rent by the room than by the whole house, and when something breaks (normally) it comes out of the security deposit and that helps me fix up the house to make it nicer for the next tenants.

This allows the purchase to act like a normal purchase transaction and avoids all the construction complexities. 

So I'm wondering how is it normally done.

From what I'm seeing I'll have to put down 25% down payment (this is normal for rental real estate apparently)  on a 315,000 dollar house that's about 80k so the initial loan is about 240k    lets say i get the value of the property to re-appraise for 375,000 and i take out a 70% refinance loan that is about 260k  that nets me 40-50k cash, but i could foresee cash on cash return of +250-400 dollars from income.  

I normally brought any property that needed to be shortsaled or foreclosed to my broker and list it .

Good evening, I'm just starting my real estate investing and was wondering what are the steps for a hard money loan, my credit isn't great to get a normal loan.

Some do, some don't, no absolute norm.  All