Wondering where to start my roots of my journey to my new adventure in property investing?

Upon receiving the sellers disclosure, I learned that the basement flooded (3 in of water) thanks to city pipes backing up from root blockage about a year ago.

Lean on your relationship with the seller and your roots in the area ("We've been coming here for years, we've always admired your house, we'd love to retire there" etc) and hope he's more taken with the idea of someone enjoying his house vs. making top dollar from someone who will tear it down.Good luck in making your decision!

It seems to me that I can't do it at all where I currently have roots (the SF bay area) - structurally, it is off the table from a buy-and-hold perspective, as prices are just too high, even for fixer-uppers. 

If there isn't a logical reason for rebar to be in the line, it's probably roots.Regardless is it's rebar or roots, you need to fix it for the long term viability of your house, your tenants, and your mental health!

I leveraged (via HELOC and a cash-out refi) my home and a rental property I had in Bend in order to buy in Tennessee, where our money goes a lot further, and my wife and I have roots.

Anytime something is completely vacant (whether that's an apartment complex or an MHP), my warning lights go off wondering what the root cause of the vacancy is.

While you're passionate about helping your Buyer, I hope that you are looking at the bigger picture and trying to root out bad agents.

You might need a good inspector to give you report about all the house issues . also a contractor to give you estimation of how much money and work needed to make it rent-able, remember if you want a good family to rent your home , you need to have a neat kitchen and rooms. old houses can have higher bills, leaks under ground , tree roots pushing the structure of the house from underground , beside like you said , out of date building codes that any simple fix might require re working all the house. 

@Adam Scheetz The root of the problems is also apparent throughout your post.