old thread but let me give you my 2 cent if you're still around or for the lucky others who may read this postLet me tell you this loud and clear, If you can, RUN away from the building and safety dpt.

I moved out of my parents safety blanket when I was 18 and started my freshman year of college living in an apartment with my best friend from high school.

Similarly as @Joe Villeneuve has pointed out. 9/10 times you will be fine as long as you have a solid strategy with a margin of safety and manageable leverage.

I am not sure if they can come up with 10% down payment right a way especially they may need reserve money to install fire alarm equipment and fixture in the property for patients safety and code compliance in the next 3 months.

The banks see this as a safety in some way and a track record of reliable income .

Pulled out an old medicine cabinet that had a slot for used razor blades in the back wall and found something like five pounds of razor blades in the wall.

Based just on the facts you have stated here and common sense, you don’t have any legal obligations to reign in spirits.But of course, you might be the kind of landlord who wants to go above and beyond to ensure your tenant’s comfort and perception of safety.

Thier discount gives them a target yeild, but they also want safety.

In this way they get the benefit of the safety of cash still getting good returns and the potential bounce from strong leverage but concentrated in fewer properties so risk is less.The other issue is the desire to wind it down. 

Their leadership has a vested interest in this family not being evicted but also the hoarding is a safety issue they can address.