That way we don't have to over-complicate the offer paperwork.

Prioritize the essential updates, like the floors.

I am kind of in the dark when it comes to paperwork for renting a home as this is my first time.

Basically your friend can get a guaranteed return by lending you the money for purchase and rehab at a fixed percentage (say somewhere between 6-10% - I’d be willing to pay a higher rate to a friend that makes my life easier in not having to fill out massive amounts of paperwork, hiring appraiser, having credit pulled, etc).

They have a dog in their unit without any deposit or any paperwork that proves it is a service animal.

A normal title company might vapor lock over a non standard deal like this, but your RE attorney can create all of the required paperwork to get this deal closed. 

Buying the second unit would make me a 100% owner of a duplex that has been converted into 2 condos, so I would essentially become the only member of the "HOA" for this small 2 unit condo "complex", which doesn't really regulate anything as it is.

If you go down that path, spend some money to have an agent or lawyer review the paperwork to make sure everything is in line.Another option to consider is to drive through the neighborhoods you want to live in and scout out properties you would be interested in.

That’s why the amount being taken out would be $35,000Interesting,  Thomas.So you will essentially subsidize your part time employment by withdrawing basically $3,000 per month?

I'm in a similar boat, but i have out of state properties that cash flow (less than 2 years) - my lender has told me the majority of the cash flow will essentially count as income for me.