If you paid for it as if it was performing and had equity then yes- if you bid it based on it being upside down then it’s risk vs reward.

The existing tenants have mentioned separately (this is an up/down duplex) of smell of mold.This is not difficult to believe if in fact there are these obvious cracks on the home exterior.There is no doubt water/moisture is getting into the home and creating a condition for mold to grow.We had a structural engineer out to do our buyer’s inspection yesterday, report is due out later this evening (11/04/17).Verbal communication while on site, indicated a mutually shared concern over these cracks.The roof appears fine.A wall in the backyard will need replacing as the soil weight has almost pushed this wall over and it is only a matter of time before this thing comes falling over.Boiler may need replaced, windows as there is some clear cold.These are just concerns at this time but inspection report will lay all this out once received later today.I should have been a little smarter in not agreeing to a change in inspection objection deadline when it was presented by seller.My buyer’s agent and I should really have talked this one over, as I realize now that, it left us with only hours after inspection to come up with our inspection objection response and to be honest I will not have time to get bids for any of the extensive repair items which I do not doubt will be confirmed in the report received later today.Seeking any advice that you can give on the following: Would you proceed with purchase of the above detailed home?

In my area, the winning bid has to fill out some paperwork immediately and then we get two hours to bring in a cashiers check for the entire purchase price.

I tell parents that they really have to bid ferociously to become the highest bidder. 

If you have a SOW, I would try to get more bids and see if you can get that rehab cost down so you'll have an easier time of cashing out on the refi.

Offer another 1K and walk away if they do not accept other wise you will end up in a bidding war.

I have bids on rehab costs already (see spreadsheet below), so those should be solid. 

I assume they are not paying for $150 title searches on every property they bid on. 

Letting inspectors and appraisers in, getting bids for repairs, taking photos, filling out contracts.. 

They'll tell you they need a full set of plans to bid accurately, but tell them you need "budget guidance for underwriting". ~ Scott