They might sell a portfolio of non-performing notes.An individual MAY be more inclined to sell at a discount.

The house next door to me is almost an identical build without the third floor studio apartment and it just sold for $245,000.

On deals where I purchased from the MLS, I either bought after another buyer did not perform and got a better price or I tore the house down and built a new larger one in a high end area where the cost at purchase was basically my land cost plus cost to demo and where I could build for under $200 pSF and resale for over $750pSF.

@Kenny Hall Decide whether to flip or buy and hold will depend on your investment goals and whether the property can perform as a flip and/or rental. 

Don't go talk to a buddy or a friend, you got to find somebody who can show you their performance.

Loan amount can be 75% LTC, 18-24 month io, maybe mini perm 5 years, rate depends, points 1-2Experience of developer team, third party vendor, excess equity of sponsors to cover cost overruns, market demand, forecasted supply, Not sure, we don't really know enough

If you've delivered a lease to the new tenant and they've signed and paid (there can be no legal contract without exchange of real and valuable goods and services), that person can sue you for performance and costs.

The house has unit 1 on the entire first floor and unit 2 occupies the second and third floor. 

Make sure you let them know if you are performing any of the work, or if the repairs will ALL be made with contractors.

Verify income, credit score, and perform a background check.