That is for people trained to buy property the correct way, but most people aren't trained so they resort to the aforementioned options. 

I think @Jeff S. nailed it.If you were determined to buy this I'd give some thought to a small office cluster for therapists/ practioners like counselors, massage therapists etc.

I would recommend finding the top lenders in the area where you're buying and gaining a good understanding of their terms.

Additionally you are released from any restrictions for occupancy after one year.So example I buy a property near the smokey in tennesses right I go up in that area every year for one week I would still have the keep the property still vacant for six months or can I have it up on the OTAS till the week I go ?  

Personally I wouldn't buy any property occupied, I'm interested in the asset itself and will decide how I operate said asset.

Lastly - sis is trying to buy the building from usoriginaly (day one after auction) we thought it would be a good idea)now after we have seen the property and know what a good deal it is - we prefer to keep it instead of the quick flipIt is hard to get our hands on a well priced multifamily and we thought this would be a good intro for us into the buy and hold.We could sell to her for a quick few bucks - but I want to learn the process. 

My friend Carrie, Victor, Daryl, my sister, ex-brother in law and my father in law have all lent us money to buy and rehab properties.

I did ask if they would need the house furnished (in an attempt to find out what they were really looking for/needing), she said they would prefer the house be furnished, however they would just buy furniture if they had to. 

This is a wild idea  but could he use the collateral in his property here in California to buy cash flowing properties in another state to generate some income. 

Depending on the nature of that LLC you could have gone ahead and taken out the new loan in your name and saved yourself all of that extra expense.