I saved up a small amount of money and decided I wanted to invest in something worth while.

Would this property be a worth while investment on a first go or would you suggest going with a easier property?

I am using the Rental Property calculator and have run multiple scenarios and still have yet to find a scenario that makes a purchase worth while.

If the  purchase amounts are that small though, it may not be worthwhile.

You may make less money but the quality of tenant, ease of management and less wear and tear on the property may make it worth while.

They told enough BS that it was not worthwhile for me to move forward.   

Might be more worthwhile to negotiate a MUCH lower price on the property instead to account for cost of repairs.2) Assuming somehow issue #1 is resolved and FHA clears the purchase: I am new to the area, and am not sure what the costs will come out to, but my hope is <$5-6k initially as I start my investment mostly replacing windows and painting (I’m told always to expect to pay more).

They did tell me that the auction won't be for at least 6 months and the property can be reclaimed up until the date of the auction if the back taxes are paid off.I've already tasked the owner with contacting the law firm and sending me an email with a breakdown of what's owed (I assume along with taxes owed, there are also some fees from the law firm, just not how much to expect)  After I get this, I'll be able to decide if it's gonna be a worthwhile investment.Assuming I decide to pursue the deal, how should I execute it so that I can finance the owner to pay off their debt without the risk of them taking my money, reclaiming the property, and then deciding not to sell it to me. 

If you were to sell and use the money to generate a higher return that would be worthwhile.

Time on the market has nothing to do with whether the property is a worthwhile buy or not.