If you are serious, this will be 100% worth whatever time and money you spend to do this. 

The bank from my understanding will be writing off a loss on this loan as there is not enough money to go around.Here is where it gets interesting, there is a second lien on the properties from a seller of a hotel that the current owner of the 21 unit bought seller finance. obviously there is not enough money to get this guy paid off as the bank is already taking a loss.

As a seller, financing can make you a lot more money, but gives you risk.

You'll have something to talk about, and you may even get money for the deal.

. - not a lawyer but I know someone in a similar position who acted as a private money lender (silent partner) on a rehab to generate passive income.You could also look into the many turnkey providers to sites like Realtyshares, Honemestors, etc who will provide you with a K1 for passive income.

Lease also states, that any money received from the tenant will first be applied to any outstanding bills. 

hard money lender?

Flip or BRRR using hard money seems like solid options.

Explore traditional loans, hard money lenders and private investors to understand your financing options.

. - Investors would be wise to look into stabilized bridge products with low prepayment penalties. - Prepayment options have become more flexible. - There are a lot more bridge loans for rental products, different than original conceptions of bridge products.- Lenders want to work only with sponsors/operators they are already comfortable with- Capital is meeting the needs of investors, more flexible