The lower your price game never works, and in the end, the STR homeowner loses money and eventually closes up their STR.

Investing is expending money to eventually achieve a profit.

It is in an up and coming location and we could do 1) BRRRR (esp. the commercial unit) and 2) Flip to new construction eventually (if we have the team, the capital and the time.

I'm assuming for the water damage, something spilled and they didn't mop it up or they had the dogs water bowl on the floor and water go onto the floor and wasn't cleaned up-if either of those are the case, then I'd explain that to them.If the floor is damaged and eventually needs to be replaced, I would not replace it if they are going to stay there. 

Might make a good hold until you die, or eventually turn it in to your retirement home type property. 

Would be happy to assist with your search and eventual purchase! 

Me and my fiancé are wanting to try and purchase new construction homes in class A to B neighborhoods (275-350K) and put 20-25% downs and live in them for 1-2 years while we save another down payment and then eventually move on and make it a rental.We are not looking to scale rapidly.

Very recently I had a call like this with another builder, and when I eventually brought up the lot he owns that I was looking at he very graciously told me all about his plans to build there, and I listened intently and congratulated him on his plans, and then he said "you know what?

I purchased knowing that this would eventually be something I wanted to rent out.

Now I know a lot of people will say test prices which I plan on doing eventually but at the moment I am being aggressive on the remodeling / re investing side and since high season is only a few months a year in my area I dont want to miss out on revenue when I do not have to.