I will be building out my back of house and adding a laundry room addition on the back of the house. 

Hi,Allison.When there are two people living in an apartment when once there was one, twice as much laundry is going through the washer and dryer, and they break down more frequently.

Original floorplan Is funky and besides opening up some walls not trying to redo entire main floor plan1) Has anyone had issues having laundry room on 2nd level as far as selling/inspection?

Not only was he living there with the previous tenant's permission, he was living their with your knowledge!

I have a huge lot 1.5 acres and will have completed an on site laundry facility and am drawing up a 12 unit storage facility.

This give you the option to do a home inspection, and release if its bad, but ensures the sellers that you won't be asking for a laundry list of items.

Tax should be a wash.

I agree with @Thomas S. but based on what you said about the property, I would be surprised if this is a financeable/refinanceable property.And probably most importantly, if that PM decides to wash their hands of the property, what's the backup plan?

Just out of curiosity was he one of the lower bids?

The laundry room was also in the basement.