He would invest 20K for down payment and I would take mortgage to pay for remaining 180K.

There's still a ton of things that could 'go wrong', but I will remain patient & persistent until I finally get this deal closed!

I try to remain in the 1% rule on all purchases.

This assumes that the ownership remains exactly the same. 

Yes i would have them make the checks out to the LLC, this separates the business from your personal. the banks will only go after as much as you will owe them, starting with that property and possibly satisfying any difference owed with your personal.

if both of you are on the deed and mortgage then he should be able to live there to satisfy the requirement.

I asked (after the auction) for the remaining unclaimed properties list.  

As ironic as it sounds, if your lease did not specify this topic, you may be at legal liability for unnecessarily withholding the tenants deposit if he satisfied the terms of the lease (if there was one)...

I feel really bad the owner is going to foreclose and would hate for this property to slip thru our hands.Here are the details/numbers:4 Unit Multifamily Apartment Building in DCEach Unit has a living room, 1 bathroom, kitchen, dining area, 1 bedroom with back porch that can be converted into a 2nd larger bedroom (1bed/1bath w/ convert-able porch)Current owner has less than $80,000 remaining on loanMarket Rents in the neighborhood are about $1500 for a 2bed/1bath or $1100 for a 1bed/1bathTenants paying aprox $800-900 in rent (below market rent)A similar property was recently sold for $360k, immediately gutted and rented to Section8 where I'm pretty sure they are getting market rents and should be able to pay down property rather quickly.Please HELP!!

It's an affidavit that deals with a lost mortgage and that the current hold affirms they are the bona fide owner with power to satisfy the debt and that the debt is then satisfied.