It would be a staging place for materials for the rehab , a place to keep maintenance supplies . extra refrigerators etc. 

I would be hard pressed to drop 3k on a name in the beginning stages of investment career.

I am also in early stages of similar situation ( 2 SFH with 30 yr fixed conventional loan). 

It is however quite solid at this stage for how young it is(700+).I am feeling stuck because I am wondering if I should wait and save even more, or buy a single family (where I will also have low purchasing power), find hard money, or something else.

If you can stage the house - that's even better.Get solid comps and hand it to the appraiser.Also, make a list of property improvements you've done and if you have the copy of the receipts, give them to the appraiser.Basically by doing the above, you make the job of the appraiser easier and you increase the chance you get the right appraisal.

I'm in the early stages of due diligence, but I'm trying to figure out the best way to approach financing. 

I intend to retire in the next couple of years so I am focused on cash flow more than wealth building with leveraging at this stage of my investing career.

But the corner of Harrison avenue and Montana has a lot of developing streets and the beginning stages of gentrification with the Westside Brewery and things like Nation opening up their 2nd location in the old firehouse. 

We are currently in the "aggressive acquisition" stage.

She still has a balance of about 50k and she had the house for around 12 years.if I can just pay her equity and take over the house, I think it would be great cause she already paid 12 yrs of it and the mortgage payment is already at that stage where it will soon pay more of the  balance instead of the interest.I was just wondering what issue I might come across.