If the current owner is losing money each month, he'll surely be more open to an easy solution.It certainly sounds like this place is being mismanaged.

A couple of thoughts from a curmudgeonly old home inspector re Redfin and R.E. sales in general. 1) Judging from your excessive use of exclamation marks you're a natural for real estate sales!!!! 

So I had this crazy idea that we could renovate the house putting in a 2 bedroom/2 bath apartment and also remodeling the carriage house on the property into a rental unit, and we could probably sell it and not lose money or at least have an income property were we could rent out the 3 units and we could move and my son could rent one of the units while managing the other 2. 

Why spend money and lose money when you don’t have to?

In case my offer is accepted and there is a counter offer in court and that gets accepted, do I lose my deposit?

Do this in a market with an excess of rental housing supply and you're going to suffer vacancies. 

@Roderick SimsWhat kind of Prop 13 rights are you worried about losing? 

Once a tenant falls behind in rent ultimately you will be forced to evict and will lose money. 

This is what Ohio is doing with land contracts which the reason they are done in Ohio is because of the excessive cost and time to foreclose.

We can shower together in our 6ft double head (with separate controls) for 45 mins & never lose temp.