We've decided to contact a lawyer and sue both our realtor, the inspector she recommended, the sellers (for not disclosing any of this health hazardous mess) and their realtor.

The only real use for cap rate is to estimate how much you can sell the property for when you go to sell one day.That’s not to say that the threat of cap rate decompression isn’t real—it is.

She is in terrible health and the interior of the home is in terrible shape/living condition.

Don't know about your city, but I think in many locations you're going to have a hard time explaining to the code people or the health department about why rat control is the tenant's responsibility. 

As a retiree , I will take full family Health insurance coverage for a very low price (1.5% of my pension amount ).

You will find that the threat of a lawsuit is often times nothing more than a threat, but be prepared for the ones that actually may try to proceed.  

Depending on the loan amount, they will probably want a 15-25% equity injection.You can also utilize your health insurance claims and/or medical equipment as collateral for a secured line of credit. 

I never have heard from a private owner filing a lawsuit, although, I do understand the threat of it.Good Luck. 

Vacancy is our biggest threat as landlords for not making money. 

Damage to garage door after partying or fighting reported by other tenants and only now confirmed by seller's agent.Furthermore, one of the tenants on the 3rd floor has reported to me that tenant of second floor has made threats to physically harm her.