Most Lenders I know won't even consider transacting with a "private party" without a significant amount of vetting-- to the point of exhaustion, even.  

These are just a few things you can start with and is no way an exhaustive list.

Yeah I looked into purchasing it from him but he has the same mentality of many his age where he believes he should get the same value as other homes selling in the neighborhood just because he's in the same neighborhood and if not he'll just drag his feet. 

Over four units and once you've exhausted your 10 Fannie/Freddie loans (each of you can have 10, provided each has income to qualify and owns the property only in their own name) you're into commercial loans. 

This is not an exhaustive list, but hopefully a good start. 

Go into it with the mentality, that it's likely going to cost 3-5x more expensive than your budget, and get ready,  if it can go wrong.. it probably will!  

Issues can crop up and take root with an "out of sight, out of mind" or "the rent is coming in so leave them be" mentality.

Same mentality. 

You'll get out walking a bit taller and straighter, mentally, with a sense of purpose being mission oriented.

We have thought about this and think that getting them to move out prior to rehab could help as well as having them sign a 6 month listing agreement before work starts so that they are mentally committed to the deal.