I'm open to any advice that anyone here has to offer. have a great weekend everyone

Investing with foreknowledge that property values are falling seems like a timing problem or at least a situation where my offer would be reduced to reflect this coming change.As to how much to put in as a down payment that depends more on your numbers, your risk tolerance, ability to get financing, cost of financing, etc. 

I've been interested in REI for a year or so, and am only just now finding out about the BP community and all of the resources it has to offer new investors.

You said they have half the funds though so you are offering 50% leverage or are you offering 50% of the total project cost?

So I suggest getting a ‘best guess’ figure based on several sources (Airdna, Rabbu, STR Insights - don’t rely on just one) and then build in some conservatism and see if you are still comfortable what your pro forma kicks out.

@John Cava, feel free to contact me directly; I'll do my best to help and can offer a complimentary 15-minute consultation. 

You lost me completely by your failure to understand that if a buyer approaches a seller and offers to take over their property subject to the lender's lien, and stops paying and puts that borrower into default or, if the borrower was in default already, that "buyer" may run afoul of local/state laws and may be accused of equity skimming.

Lenders can have limitations on those without a US SS # but others offer specific lending to 'foreign' nationals.

Also, any insights on how hard it is to get a zoning change approved to make this a legal 3 flat?

Present an Offer to Lease with your terms and conditions for the applicant to become a tenant (sign lease, pay move-in monies) by a date certain prior to 8/1.