If the entire sill plate and floor joists have been eaten out by termites, such a discount would be reasonable even on a $400k house.

This is a property purchased via 1031 exchange, rented briefly, and depreciation has been taken for 3 years.Long term, it may be rented again or purchase something else via 1031.What would be the tax issues with restarting it as a rental in a few years?

FHA is tough on a few things like "Chipped paint" any signs of chipped paint will stop financing and need to be addressed (Painted), Loose or missing hand railings, Water damage, Mold, Termites, Outdated electrical or any wiring that is exposed.FHA will also stop you dead in your tracks if the appraisal shows anything that is considered a "hazard or safety issue" and must be fixed.

Expect the whole can of worms, ungrounded wiring, old panel, cast iron sewer lines, cast iron supply lines, termite damage, roof, etc. 60k went by quick for me and I was doing most of the work.Seeing the comps in the area, pull the permits and make this a 3/2.

Somebody wanting to sue for you backing out of a bad deal or accusing you of selling them a property with defects like unknown termite damage).

It went about as one would expect, but I think long term it was the best move.

I found termite damage and the termites aren't active, do I have to still spray?

We try to advise investors not to purchase in over densified projects, there are some developers just trying to maximize profits for them and developing projects that in my point of view are not the best for the long term, it creates what I call nightly rates cannibalisim between owners lowering ROI, it also doesnt work on your favor if you ever want to flip it. 

I don't love letting folks view when an existing tenant is there because it is not a controlled environment, however if you have had a recent inspection of the property and you know it shows well and the tenant is amendable then "GREAT".I would add that since your tenant is vacating early, they are still financially responsible for the lease until end of term. It

If you just want 20yr 2MM non convertible term its price shopping except prices may change depending on how automated the carrier is and if a paramedical exam is required.