I am 23 and have saved up enough money to start my RE journey.

There is no reason for them to just forgive anything, but it would potentially in their best interests to accept a chunk of money from the owner and possibly do a friendly foreclosure (hand them the keys per se).

Become an LO in the Private/Hard Money space, and pursue both.

That's why it's not selling.In most markets, your Maximum Allowable Offer (MAO) to a seller should be no more than:        MAO = (70% * ARV) - Repairs - Wholesale_Fee        MAO = (0.7 * 290K) - 40K - Wholesale_Fee        MAO = 203K - 40K - Wholesale_Fee        MAO = 163K - Wholesale_Fee               - OR -        MAO + Wholesale_Fee = 163KSo, you'd need to get this under contract with the seller at under $163K to make any money at all as a wholesaler.At $200K you're NEVER going to get any interest from experienced rehabbers.This is also why you probably got no resistance or pushback from the seller.

It's time deploy $$$ into other opportunities including the one with your partner.The cash-flow would have to be crazy to hold it and that's if you don't need the money, but it sounds like you do for the next investment.

You further implied using a hard money lender - why?

Multiple, billion dollar companies are investing substantial amounts of money into our area, such as Intel, Google, and Amazon.

It would really suck to lose money and also have to pay taxes. 

A 5 plex vs 13 plex can have considerable financing considerations.. a strategic mortgage partner will be critical to answering some upfront questions to provide a property search framework. 

If tenant is typical without a lot of money, and being honest, I would reach a reasonable settlement and not add misery to their life.