All these other houses look so nice and I don't understand why someone would invest/buy a property and NOT flip it or fix it up and rent it, etc.I don't want to reach out to those "owners" because there's no way they'd want to sell it at a low price.

It was me, personally and the Seller) a not so nice letter threating a bunch of stuff that wasn't true or done.   

In addition to moving rents to market and operating the property more efficiently, we uncovered an opportunity to build out 4 additional units.

Well it took you several months for you to uncover the issue....how was it then supposed to be discovered in a couple hour time frame from the inspector?

With supply being in the red across the Austin-Round Rock MSA, supply in peripheral cities is being uncovered and made available to purchase. 

You'll need to consider setbacks, covered vs uncovered ground (how much asphalt / concrete / building can exist), zoning (does the area allow multi-family or do you need a variance) population density requirements, building height requirements, and any other fun things that the town regulates. 

It is so nice to see some folks here from the Flathead Valley! 

That may uncover any recent claims. 

There are deals in every market, the key is to figure out how to uncover those. 

I’d negotiate hard for the right price on this one, and be ready to walk if the seller is unreasonable as there are likely some additional issues hiding in the walls that you haven’t uncovered yet.