I still didnt come up with some quality idea how to structure this partnership.

SUMMARY> >>> >> 6400 SF Office Building> >>> >> 6400 SF Lot> >>> >> Built 1974> >>> >> Features, 5 private offices and meeting rooms,> >>> >> 4 restrooms, 2 with showers,> >>> >> commercial quality kitchen..perfect for> >>> >> architects or engineer or others> >>> >> Loan Matured February 2016> >>> >> Current Default Rate 18%> >>> >> Monthly Payment $5,501> >>> >> NOD's Filed in 2014 and 2017> >>> >> Comps at $1.8MM> >>> >> CURRENT UNPAID BALANCE> >>> >> $1,039,000 +3% fees to be paid by buyer

High quality Berber carpet with 25 year warranty was purchased ~ 10 years ago. 

Your best bet when it comes to finding good, quality advice is to solicit it from people who are making it happen in your geographical area since REI is so local.  

Surely, to build a NEW same-quality home there shouldn't cost $400k+?

Just to underscore @Mike Dymski point; I recently met with a contractor in Ohio who took me to another site they were working on to show the quality of work.

Buy good quality rentals with solid cash flow.

And please keep in mind that your ability to sleep well at night and your quality of life might be worth more than making a few extra bucks.   

I have had great luck with finding quality tenants in about 10 days. 

You want the turnkey provider to own the management company so they are incentivized to place quality tenants or it's them who deal with the headaches.