I can't figure out how to accurately do an analysis due to the fact the numbers aren't making sense to me.Don't destroy me too badly for posting the question without contacting the sellers yet to solve some of the question.

A bad tenant who destroys a house sometimes motivates a seller.

Ignorance is not bliss and can unfortunately destroy some unprepared and unsuspecting people.

So I suspect your tenants won't be in too big of a hurry to move, which is one of the things that makes Section 8 work - you get your money, they risk losing Section 8 if they destroy your property or don't pay their portion. 

Or what if the seller has to take back the house and the buyer destroys it first. 

If he remains in your building without cleaning help He will destroy your building, and impact negatively on your building, and on your other tenants, and on your bottom line.    

Ask anyone who get destroyed in 2008 how that strategy plays out over a long term. 

I am can't afford FHA loan since PMI will be will around $350 and it will destroy my cash flow.

Interesting, I was talking to my wife about this last night, and one of our comments we made 3-4 years ago when we got back into real estate in a bigger way, was that this is a market that we won't see again in our lifetimes.Prices in our target neighborhoods were destroyed, what was being sold in 2007 for $100k+ were scraping to get $25-30k.

After the auction, I drove by to see that an addition for the third bedroom had been destroyed by someone stealing the aluminum siding and the rest of the house was destroyed by copper thieves and a tree that had fallen on the front.Lesson learned:  Know what you are bidding on or don't bid!