IMO anyone advocating walking away is promoting harm to the unsuspecting public.

And if one of the units is currently occupied, that could mean they're renting an uninhabitable unit to unsuspecting tenants. 

I'm not sure if the seller is just waiting for an unsuspecting buyer to make his payday or what?

Dion based on the information provided I agree with you.. worse case scenario our investors is dealing with a loan that the broker did little or no due diligence on before marketing it or its was one of those late night note brokers. this loan looks like it was  sale of a derelict property to an unsuspecting Note buyer. 

Any unsuspecting owner will generally bite.

Always underestimate the value and if the numbers still work you will know its a great deal.The city appraisal is BS in my opinion and so are BPO's.I also believe that in lower end areas there currently isn't any true value and it just comes down to what cap rate the investor wants to achieve.I have seen houses sell for $2,000 in these lower class areas and then another one across the road for $80,000 (unsuspecting foreign investor).Thanks for reading and have a great day.

@Jay Hinrichs has worn a white shirt with a red cross on his back and to be honest so have I many times assisting unsuspecting Aussie investors that got screwed by turnkey sharks.I have been in the US for 2 years now and have seen every trick in the book to swindle or hide numbers in your favor.

While the seller might have good intentions (simplify the transaction, save money on closing costs, title insurance and legal fees), but this is typically a great way to dump undisclosed entity problems to an unsuspecting new buyer. 

No Appraisal could be a con for some people because I've seen unscrupulous agents try to sell over valued property to unsuspecting new homeowners on the premise that this property didn't require an appraisal and that that was a bonus!

Watch out for contractors as they have a way of walking all over unsuspecting and inexperienced board members.