The gamble is too large.

It's a game of gambling and musical chairs.

I looked at houses in Fountain square a few years back and saw ARV's no higher than 80k within quarter mile, and then two chicks and a hammer, and I believe Ryan etc took the gamble, and we started seeing sales of 150k+ within 1-2 years...

Cash is king in these situations,go with that.No bank is gonna give money in an unknown situation so if you don't have access to the inside of the property for appraisal and approval,you won't get a penny of financing unless you convince hard money lenders to take the gamble with you.You might want to line up some cash investment partners to help with the gap funding if you can't get your $34,000 less offer accepted.Good luck in your endeavor.

But it seemed a small gamble. 

Most people got burned in the market crash, me included, because they were gambling with market appreciation.  

here is a copy of a blog I did:Hiring a property manager is an important decision, and can be an asset for a property investor, but can also be a detriment if not chosen carefully and without some due diligence.

Its a big gamble, and one the note seller is obviously not willing to take to potentially earn a meager $5k more.

This is a gamble in regards to appreciation. 

on one of your post a reply came back that your comparing oranges to Iceberg lettuce and for sure you are when you compare vegas and Memphis.What caused the meltdown in Vegas and PhX  @David Faulkner  well I can tell youVegas relys on gambling and tourism in the crash any tourist city and gambling city got hurtand then for rentals  what killed that market and phx is that a very large portion of your renters were in the building trades subcontractors laborers etc etc.. building came to a complete STOP.. those thousands upon thousands of jobs left.. and most of those folks rented.Memphis is a rental city and has basically always been one with about 50 to 55% of pop are renters.