There are also tax implications.

I've been knocking on doors, there is one that seems like it's abandoned, however despite finding the owners name from tax records I cannot seem to get in contract with them to make an offer (despite trying x, y and z). 

Am I setting myself up for a tax nightmare?

Keep in mind taxes go up as do rents.

@Bryan HartlenManaging low-end properties can be demanding due to higher tenant turnover, increased maintenance needs, and frequent rent collection issues.

This was done to protect senior citizens on fixed incomes from being forced to sell their homes due to unaffordable property tax increases.Since the passing of this amendment, all properties in Michigan have two property tax values associated with them:State Equalized Value (SEV): supposedly equal to 50% of the market value of a property, not based on recent sales price.Taxable Value: the SEV annually capped as long as there is not a transfer of ownership.City Assessors are charged with determining how much property values have changed each year.

Who covers the tax bill when they don't pay the tax bill or the insurance? 

Heating costs go up in winter, as does electricity due to the reduced natural light and more people indoors.

Hours later she sends me the bill and says "He had to put a new lock in due to something with the door."

Technically it would be best to get a C Corporate or S Corp. to flip properties and since you are considered a dealer if you do several properties a year and this could have negative tax consequences in an LLC.