I'm hoping the issues have all finally been resolved.

There is no reason you can't do everything at once as long as it is related to your final goal.

After looking at about 50 properties over the past year I believe I may have finally found one in Phoenix, AZ.

That's probably the more realistic comp.I would do the analysis exactly the way MikeOH does above, which indicates that you shouldn't be paying more than $35K for the property (acquisition + rehab costs).

Rob,What I have seen is, the seller will lower the final purchase price by 3%.

You can learn all about contracts, and negotiating, and acquisition strategies, but if you don't know what a deal looks like in your market, you aren't going to get very far.

Yes  I will PM it is hold with comps going at 100 k more than the acquisition cost . 

He finally uploaded photos the day before guests arrived and the place looked decent but there were a lot of things that were shoddily done. 

Option #1 will most likely meet that criteria, you can price for any major repairs/cap x improvements and negotiate those during the acquisition, this will help you hedge against major items breaking down once you acquired.   

I spotted this ran down complex that has a ARV double the acquisition and rehab costs.