I personally would have a chat with the tenant about up-keeping the house and only ask for a monthly pet rent plus an additional security deposit (not a pet deposit) because of the indoor dog.

So all I will loose is the property taxes and home insurance and utilities I presume and a bit of upkeep. 

If I could carry the financial weight to rehab & hold, I would, but I need to get started somewhere.

Since it's a repo, I'm uncertain about other major maintenance such as windows, doors and roof.So here goes my take on the strategy:Offer 400,000Get 500,000 hard money to account for rehab and upkeep costsRehab and Rent all 8Refinance mortgage for a value of 700,000, so 80% amount to finance = 560,000Pay off the hard money lender and fees.

Very old and tiny 2/1, but no major upkeep needed in short term as roof, water heater and furnace are all newish.  

From what I've seen of old redwood lumber it gets very light weight- like balsa wood.

However, my height is 5'1" and my weight is 110 pounds.

It's all fixable. the floor is bad in a few places... that wall in the kitchen must have had a leak for MANY years because the 2 "sistered" joists in the basement have sheared off where they meet the concrete foundation. can you imagine rotting and shearing off a 2x4 standing on the short end just by pure weight overtime?

We even met with the previous owners who hadn't paid a mortgage in several years and had decided to sign the house over to an investor because they couldn't afford the upkeep anymore.

If you can get yourself a 2-4 unit property you will be way ahead of the game.Don't give up - Keep working it.