It is common for the investor to gradually fund the rehab as it progresses.  

Here is the little bit I know of the place (I have done some work for him there in the past): 1800 sq. feet. 4br 2 bath (2br 1 bath per upper and lower unit)Purchased in '09 for $197,000Current City Assessment at $169,000 (it needs some love.

Would need to know the NOI, but based on 80% occupancy, $500/door rent, and assuming you profit 40% of revenue, I think your assessment is close at 20-25k/door.

You need to be able to assess all the different categories in your market, understand them based on your market and choose one that you can get your head around and find value in. 

All has been fun and rewarding on different levels but as the years have progressed, the equation of trading long hours for additional income has forced me to re-evaluate my investing strategies, principles and goals.I arrived at Bigger Pockets after kick-starting a personal goal to look at passive income investments streams a few months ago.  

Perhaps if you tell him it was a tax sale they could make an exception and use the Assessed value. 

Consider this, you most likely will be setting your own financial progress back 10+ years taking on over leveraged property.  

Yes David, I agree and that comes from ignorance and the investor not properly assess values which simply leads to disagreements and deals killed as a result.

From there, see if you can get a real estate agent to pull comps on comparable houses and see if they have assessed your property correctly. 

Maybe I will share my progress here.