@Ian I LeinwandFrom a Private Money Portfolio lending aspect you would most likely have (2) options on a (2-4 unit). 1) Rehab/Fix and flip type loan if rehab/repairs are needed >$5k- Depending on experience and Credit, acquisition LTV would be between 85%-95%, estimated Interest Only rate 7.09%--9.99% w/ 1 point for 9 months.  2) Rental Loan (2-4 unit), Depending on Credit, Max 75% LTV (80-85% SFR), Estimated 5/1 ARM rate 7.125% Full AM. or 7.375% Interest Only w/1 point.  

You can learn a ton by self-managing, and by doing your own repairs. 

So you'll need to know the market well, what fixed up homes sell for, and how to generally estimate repair costs to know if you can make a deal or not. 

I feel the loss of earnest money is a cost that will save me many thousands of dollars in vacancies/repairs etc of a bad investment.My goals:I would like to replace my current income stream in the next 2-3 years.

Numbers home value20k downloan amount 165k conventional 4.5%                            Rent-$1600PMI-$45                                                                                Cash Flow-$237Insurance-$50                                                                      ($397 self manage)vacancy-5%repairs-5%cap ex-7%management-10%(being my first i would self manage)If this is a good deal.

If i go this route was considering a $500 limit, which should supply enough drywall, mud, screws, etc. to get them through the drywall repair stage.

He couldn't pay it before, so I doubt he would be able to pony up the money now.The house is in a good location and needs a moderate amount of repairs, the numbers are positive.

What kind of repairs does it need? 

If I can be of any help or provide advice, welcome to do it...if you need help with management or repairs and renovations we would love to help. 

The problem with that, as I see it, is that the repair costs are part of what determines your offer amount (the whole 70% minus repair costs thing).