My approach was to purchase and convert the building to all HUD tenants for guaranteed and timely rent payments and so long as a property management company would handle the day-to-day it would be a fairy sound investment. 

Today I was at the property dropping off some materials, and the tenant in the unit we have done little improvement to approached me.

I am studying to become a Software Engineer (and hopefully someday design software for REIs).

You may also consider a more passive approach or partnering if you have others in different areas that you can trust. 

. - What was your approach in making a potential source of capital aware that you are looking for partnership? 

This article by BP's Brandon Turner is a great place to start to get some ground-level understanding of how to approach a Seller Financed deal.The Definitive Guide to Using Seller Financing to Buy Real EstateIt sounds like you have a really great opportunity with this seller, and you are smart to make sure you handle these first deals with them professionally and knowledgeably.Start with this article and let us know if you have additional questions that apply to your specific opportunities on these properties!

Are there any legal reasons not to go with this approach? 

How investors can legally and ethically engage in wholesaling:These guidelines are designed to protect all of us from scrutiny, investigation and possibly worse.

Most times if the landlord is fitting out the space, it is well known and the Owner approaches the tenant requesting details on what they'd like done.

Although that product is great for follow up and wholesaling, we are looking for a workspace designed to also manage rehab projects and rentals, as well as a better place to keep track of our private lenders/coaching clients/agents etc.