Confused in Miami: should I terminate or proceed?

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Hello BP Freinds, I need some advice.

A vacant 24 unit property in the Shannedoah market of Miami. The seller offered 75% financing on a $1.9M purchase price + a buyers commission of $100,000. Initially the building looked liked it needed about $700,000 total, for which I got a pre-approval from a local bank on 75% of the construction costs. During DD one thing after another popped up, zoning informed us the property would need to be converted to 21 units, structure has issue, and the electric is shot. So in short the building is now a complete gut renovate. With out boring on the details this went from a 15% + return cash on cash, with an ARV of $5M+, to now being a 6% to an ARV of $4.3M. However the total cost for acquisition and rehab will be $4M, so that gives me only $300,000 so hear is the question....

Given the unforeseen issues with the city and the building condition I think I can get the owner to give me 90-100% financing. So there is a chance I can get into this deal for $600K total of my cash, I am a buy and hold guy and something is telling me to take this even though the return is so low, as the opportunity for 24 units in this market in the long run will appreciate considerably, however prior to this deal landing on my lap, I would not even consider anything less than 12% on a leveraged deal. However those deal were 8 units max not 24 units on a half acre of land. 

Am I right in my thinking, take the deal because I'm in it for so little cash or run for the hills...