Let @Karen Margrave give you a little help on the zoning and other issues.My first blush is if this is in Santa Clara county.. and the price is what he is asking then there is probably some hair on this deal...

Many markets are now headed into "Hypersupply" and "Recession" phases of the market cycle (see chart below).

And the only reasons I haven't pulled out my hair and quit is because I don't have much hair left and because I sometimes get a flurry of acceptance activity like I mentioned in my blog, telling me that my method still has merit.  

Also does anyone else fix drainage issues in tubs and sinks that are due to normal wear due to hair and everything else.Thanks 

My thought is they probably had a hair brained idea to make money off of their 'vacation rental' but they needed a leased tenant to satisfy their mortgage company.

Your also talking about a situation where your going to talk to an investor which is fine - now if it was a little old white hair ladies house that just burnt down that your going to try and profit from the situation it comes down to if it were mutually helping her vs taking advantage.

I don't mean like they are completely running around with their hair on fire, but most people are happy to find a deal that cash flows or otherwise meets a goal.  

The last chart I looked at (below) showed the new construction market-share for sub 1,400 sq ft homes just getting crushed over the last 15 years.   

You can look at the charts, long term and see where each one runs up to Maturity and then crashes like Hadar Orkibi points out with trying to catch a falling knife.

Some red hair, and you would be twins.