Negotiation on Price after horrific Inspection results

[Hope S.]

Looking for some advice on negotiation on price after a terrible inspection.   I found a 3 unit with a great return, in a great location.  I love everything about the place and the price was right given the rental income and expenses.  The problems arose when we inspected the building and found some major deferred maintenance issues.  Its a building from the 1850s, and it looks like it will require all new siding, major masonry work and support beam replacement in the basement.   

I would normally just walk away, but the location of this place is unbeatable.   

So my question is, in this situation, where I'd still like to own the property, is it kosher to now knock 50k off our offer for the items listed above (which might not cover it all)?    Anyone do this with any luck?

The place was first listed over a year ago and then relisted this spring, price only budging downward one time by5k.   

Should we run for the hills or just lower our offer and see if it sticks?