A lower price doesn't harm your seller unless the lender is going to pursue a deficiency.

I would personally steer clear of having 10-20 sfr homes...I would lean more towards finding a commercial property that is 30-40% under market value due to cosmetic deficiency, and poor management.My budget would be $500,000 purchase price, $50,000 renovations, & $50,000 Rainy day fund.Property would need to gross $110,00 per year x 50%= $55,000 annual profit or %10 of original investment.I would also use the property as collateral for a secured LOC..

The lender may try to get a deficiency judgment against you for some or all of the shortage.

If they get nothing because they are wiped out in a foreclosure they still have the ability to pursue a deficiency judgement against you in an effort to collect.

Everything is negotiable - especially after an agreement - never quick working on reduction of price.A good home inspection service will come up with lots of deficiencies - use them to your favor!

I guess they are willing to eat the losses on an eviction including the security deposit "deficiency?" 

I also get a personal guarantee with SS#, DOB and contact info. making it clear to the borrower that I will pursue a deficiency judgement.

You are taking over the existing leases, so that part is hard to correct if there are any deficiencies.

I also want to see the bills paid to address past deficiencies. 

Also see page 2 of a version of the most widely used standard appraisal form: https://www.fanniemae.com/content/guide_form/1004.pdf which says: "This appraisal is made [check] “as is” [or] "subject to completion" per plans and specifications on the basis of a hypothetical condition that the improvements have been completed [or] subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed, [or] subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair:..."