The plan (at the moment) is to attempt to use a FHA loan in order to finance a small multi.

Most wholesalers attempt 30 days or less with advertisements that say quick closing.

First attempt to work with the property owner suggesting they have guaranteed rent whether the home is occupied or not.  

Well sorry to hear your attempt to wrap this loan seems to be failing.  

We currently own one buy/hold and haven't had to do anything major with it and are looking to make this endeavor our first flip.

That's is why I make every attempt to be "In the know".

Something else to keep in mind is that 3rd parties to ISO are always attempting to recreate the data and the results are less than spectacular.

If they are two entirely separate structures unrelated to each other in any way legally, then I believe that you will experience a lot of trouble and few advantages in attempting to bundle both properties under one mortgage.  

I can add that you need to make sure it's filed as a judgment  and hopefully you have work information as part of your records to attempt a garnishment.

They nearly lost the contract and ended up using private money to close.Then again, if you do not have the down payment and cannot get a private money loan to get it, then your choices may be limited and 203k is your only option if the home requires work that prevents you from getting a traditional mortgage.Good luck in your endeavor.