Sounds as though someone is attempting to enter into the REI arena with little or no knowledge on how a real estate transaction works.

I'm not a real estate attorney, nor am I attempting to give legal advice.  

Should i start improving the house and try to raise the value, in an attempt to sell it for more when i leave in a few years?

I suggest you split your list into several different groups by response:A) Now - pursue further to convert and attempt to closeB) Not now - nurtureC) Never or no good.Be friendly and don't try to force anything which doesn't seem to flow naturally.Personally, I find it easier to work with a 'no' or an angry person than a confused person.

I wish you well in your future endeavors.

Biggest theme I have seen is across any endeavor is just get started, probably the hardest step and now time to get on moving~Initial strategy was to buy a MF house, but after realizing the places we want to live are costly, decided the new strategy will be to buy our primary condo, then leverage the equity in that to buy a second house as a multi-family. 

As @Brian Gibbons shared his concern too, I'm wondering why you would attempt to complete transaction (1) before the current record owner/mortgagor has finalized their loan mod?  

However, I'm astounded to still discover that although most of the business owners that I know have bona fide, real, not canned websites and others either have none or a cursory attempt to check a box on the checklist-type of website.  

Hi Everyone, I'm in the early stages and still attempting to put together a plan of action.

@Michael I don't have much to offer in terms of your question but good luck on your endeavor.