Based off the quote and.l negotiating with the seller, if the numbers work out, the work is yours!

Is there any other solutions assuming the property and numbers work out?  

If you do work out the selling price, your friend should probably be on the title of the property so when you sell, you both share the profit and tax hit.Can't help you on the price.

Is there a price point for condos or SFH that seems to work out for cash flow?

I now would like to use my SDIRA where I am in the role of handling the workout: working with vendors (servicing, loss mitigation, attorneys, etc) to work the note to resolution, but of course no direct borrower contact.

With that being said, I also like the idea of having a retirement account for a "fall-back option" if things don't quite work out as intended in the real estate space.  

In some states there is mandated mediation, which is the creditor and debtor coming together to see if there is any deal to workout which helps the borrower reinstate the loan and continue to pay.  

I figure if it doesnt work out, i'll need to replace it in 3-4 years and will have learned my lesson.

No idea how this will work out!

Work out the deal so that the deal is equally beneficial to both parties.