That being said, you make a great point that the costs may not be as low as we believe them to be.

I would be looking to get it at a low enough price, along with the home improvements done after purchase (also with 15%-20% down) to take out a home equity line of credit.

Is that a legitimate excuse for his score being so low?  

Whats my best option to invest in his soon to be foreclosed house with very low money down?

BTW, estimating expenses as being 30% of gross may be too low.

They foolishly think they need to keep the rents low to hold onto "good tenants".

This late in the season, it would be a challenge to find a group of four students who would be ideal tenants.  

I have seen folks try for years to find these mythical private lenders and never do a deal because they can't raise a dime.what the OP is looking for is an asset based lender.. and those are not very common anymore.. especially if you have to find one on the internet means you don't have a track record and have little to no chance of finding anyone who is going to 100% your deal.. unless its just such a low LTV that they are making the loan with a better than 50% chance of owning it when the borrower can't pull it off because the borrower is not experienced and can't execute.  

I've read about an 8-11% discount from the listed price, as well as going as low as 15%, primarily on properties that are fresh on the market.

Feel free to reach out to me with some questions, I am not a seasoned vet, but have been in the industry for a while with some knowledge.