They always go the extra mile to make any wacky transaction happen.

Collect the rent and keep it safe . 

Is it safe to assume that this is older inventory, ergo, higher repair and maintenance expenses?  

Our plans include searching for and filling small holes and cavities with acoustical caulk, adding a layer of roxul safe and sound between joist, attaching resilient channeling, and finishing with a 5/8 in drywall layer. 

How do I follow through with the transaction and keep the property from going through the foreclosure process to secure the investment for me and the other investor?

A property on the "verge" of foreclosure closes no differently than any other on market transaction.

Why not go for a seller-financed transaction? 

Going the route of a safe good paying job and saving 60% of you income to invest will make you very successful in real estate investing in the long run.

I wouldn't be opening this IRA for just this deal or flipping in general (may invest in longer term assets later on down the road), but would this transaction cause any UBTI to me personally? 

As a matter of fact your transaction does technically meet the time period suggested by at least two court rulings where they attempted to describe an appropriate holding period as two tax years and two calendar years.