kevin There are both lease purchases and lease options. 

What is preferable option - should I ask them to be the applicant or should their son be the applicant and parent be the cosigner?

The Father applicant responded by offering 6 months of rent upfront (even the entire year) and is willing to provide 3 months rent of refundable security deposit for the additional dog risk.

D offerings together as an "investing club LLC."

Home depot offers zero interest for two months.

Quote from @Jazzous Anderson: If you can afford it, separating the utilities and making tenants 100% responsible is the best option.

Based on the age of the surrounding facilities and lack of new, updated options, coupled with increased residential development projects in the area, my gut tells me it is a great location but don’t want to assume that if I really should be basing off of TOTAL nsrf being below or at 7. 

Two years ago they were offering me a competitive rate however after one year they raised the rates quite a bit. 

Yes, you can use FHA and Conventional program for a primary home if you are buying a "Distressed" property - (Will not pass an inspection) "Subject to">  FHA offers a 203K loan and Fanie Mae offers a Home Style program which has the sole purpose of working with distressed properties. 

Since you'll be using a property management company, either way, buying the property base on profitability vs location might be the better option.