Depending on what your thoughts , wishes, intentions or desires are for the use of the land you have to make sure you will be able to use the land for what you want.

They currently owe less than $120k on the mortgage.My goal is to buy the house from them while simultaneously receiving a bank approval letter from the aforementioned prospective buyer on a purchase price that meets their budget and our desired return.I want to avoid going the hard money route.  

How are they going to know and understand how you want to use your money,  run numbers,  understand desired return? 

@Jay Hinrichs I can write as many as I desire.

Even when people thought it couldn't get more expensive it went up another 20% in Sydney last year.Vancouver and Sydney are very similar in that they are the most desirable places to live in their countries and until recently Sydney was also in the top 5 in the world but now only Vancouver remains there. both cities are land locked, and they are also both beautiful harbor cities. 

Big bonus if the investors grew up here, live or work here, etc, but I think the most important aspect is the desire to make conscientious and responsible choices in their investments, and a commitment to helping the neighborhood grow.

If all units are exactly the same configuration, same finishes, same rents, etc. then I'd wait a month or so and see which is the least desirable tenant.

Of course I don't live in Canada, so not certain about these numbers, but I'd think you could get the desired effect for less money.

As a farther DC burb, you are more likely to get the families, which naturally makes the three bedroom more desirable.

If you are wanting a newer look of painted walls, you can fill the seams and cracks with spackling and tape and bed or texture as desired then paint it and it will look like a normal sheetrock wall.