All in all, hotels can do very well financially, but are super capital intensive. 

Regarding the high cost of the abatement process, my understanding is that it is mostly labor for the intense cleaning they need to do after the abatement.

The numbers appear to work out so it may well be worth pursuing this deal despite the roadblocks 

I call them "get up to speed" costs.Break-even purchase price vs loan costs including PM, vac, and cap rate work out (for me) @ $240K with 25% down, @ $225k with 20% down, @ $210k with 15% down.If I consider $5k for get up to speed costs (and that the roof is good), that still means I break even in 2 years +/-. 

Of course, a duplex could work out better for a house hacking approach.

If it is non performing depending on the workout it can be $40-$95/per month.

It was intense. 

It will be awesome for you if the numbers work out.  

@Don Carey My clients and I usually wish the Sellers well and tell them that, if they ever change their mind and want to take our offer, to give me a call and if we haven't already bought something else, we might be able to work out a deal. 2/3 of the time you never hear back from them, but sometimes you do.You know what you're willing to pay based upon your business model and stick to it.You as the Buyer have the right to offer what you are willing to pay.As the Seller, they have the same right to ask for what they want.Sometimes the parties come to agreement and sometimes they don't.You're not doing anything wrong.

Some people also work out a deal with the attorney or CPA they use to act as a registered agent.