(Or would they just start charging me interest right away/ will I be obligated to make payments right away, even though the deal has not closed?)..

They don't require any deposit or down payment at all, but they want all my details.. 

These lenders will typically be 1-2% higher rates than a conventional lender and have a 1 year pre-payment penalty.

You mention the owner has paid $70k on the mortgage but that isn't a number that matters (since who knows what interest rate he's on or if he's made any extra payments), what matters is what the outstanding balance is on the mortgage and can you offer them a purchase price that is A) Fair to the owner, B) Helps them sell with some amount of equity and C) Gives you room that it financially makes sense.The numbers change based on if you want to flip it or rent it, making the question "does it make sense" different based on the direction you choose.In short, I have no idea how much I would offer...

Not sure, if 11k is enough for a down payment or not, but that's what I would do.

We have a 4-plex under full rehab right now, and only select neighborhoods can support this.

It might be more of a concern in a complex dominated by owner occupants, who would be more likely to push through HOA rate hikes that are less likely to see a net gain for an investor.Your cashflow is entirely based on how much down payment you bring to the table and terms of the loan.

Account Closed,Lenders typically start their own "wheels" in motion after the third missed payment, but it can still take a while before they get to the point of beginning the process of foreclosure.That said, Brian called it: offer him what he owes  - you decide if you want to give him any more than that as an incentive to cooperate.

I got the house for $31800 with a 10% down payment so I still owe $28620 with an interest rate of 4.42% (that can be adjusted in 5 years), and a monthly payment of $179.90.

If paying PMI, you can always find a mortgage calculator and input your own figures to get an estimate for monthly payments after your escrow account.