Advice on Rental unit with HOA issues

[Sofia A]

INFO:
Wilmington, NC
Offer accepted: $39,900 2br/2bath about 890sf
82 units in complex HOA: $150 no amenities
Rent in area: $600-650
Build in 1984

We have a contract but further investigating the HOA they have no reserve, about 30% of units in default, and they have a budget for 2011 that shows expenses higher than income for $14K, without virtually any reserve.
Lots of foreclosure units and HOA does not get the past dues fees in those cases. HOA had a special assessment last year (~$600/unit) just to have working funds.
9 units sold last year for avg price of $37.3K.
Last unit closed yesterday for $53.5K - unusually higher than all others closed last year and my offer.
My due diligence period expires tomorrow.
Should I terminate and move on? Am I missing anything? It is my second deal and I can use some good advice.
I tend to think my risks are bigger than reasonably expected in this case. Any thoughts?

Thanks!