I recommend: go find MOTIVATED Sellers, who will sell for 20%+ genuine discounts!

The only downside I've come up with that i would be forfeiting my county's homestead tax exemption discount.

That's why the seller will sell you the note at a huge discount.

The equity in the property is the only thing worth any value since the property itself is very deep into negative cash flow after expenses and debt repayment.

it is important to have contacts and nice if they are at least 2 deep contacts. 

If the bank DOES still have the right to foreclose:I would offer to buy the note at a discount and foreclose giving me clear title at that point.

Third, investors have a right to vote a sponsor out for non-performance.Forth, debt has to be non-recourse with a term of 10 years or longer.Fifth, there has to be more than one person in a sponsoring entity.Sixth, the property has to be bought at a discount from its intrinsic value. 

That is normally not possible if you pay retail market value, since if you need or choose to sell you will incur ~10% transaction fees ... without a discount, that is a 10% loss.

If you can make the proforma work with severely discounted rents, may be worth pursuing.  

So I'll discount my replacement costs by the amount of remaining expected life in the cabinet doors.