Is it too risky going forward and having the building dept. possibly destroy me financially?  

Depending upon your investment goals, note investing can also be a great way to acquire the physical real estate for well below market value, though this option isn’t for everyone as many people associate owning rental properties with the common headaches of toilets, trash and tenants.You can also run into a variety of headaches from borrowers, to lawyers, to destroyed properties.

One lady wanted to 1031 one property to another, getting ready for retirement, and now have to spend her retirement years working, with a lifetime of savings destroyed in one scoop.I looked into using 1031 intermediaries a while back, and never realized these folks are not bonded.

I looked at a place in Pittsburgh decent neighborhood seemed to be a pretty good wholesale deal listed at 29900 from pic's when I got there probably a few squatters living there at the time destroyed a lot mostly cosmetic told wholesaler would not be interested in the property at that price in that condition offered 20000 he responded if I can renegotiate I might get 21 or 22 thousand I told him 20000 is my number and he assured me squatters would not be an issue 2 weeks go by he calls yesterday and tells me I can have it for 20000 I go back over to property only to see that there have been squatters in the house also 2 windows broken that were not broken before house is dirtier than before and a slight bit of more damage than before I give him a call told him I offered the price I felt comfortable with based on the condition of what the property was in.

Roof, new bathroom, leaking plumbing destroying wood, sewage leak.  

Worse still, what if the boyfriend is angry enough to destroy the pretty new rehab that this guy he found in bed with his girlfriend just completed?

A good property manager should have experience with all this and can make sure its done properly.Also include extra money on repairs because if youre saying this tenant will go out with a fight, they will probably destroy the house before they vacate

Something like "you realize that if we dont come to terms here, you credit will be destroyed and you wont be able to buy another house for like a decade, that and car and credit cars will get a LOT more expensive for you. 

I'm on my 3rd student rental, i have renovated them completely, and put in new furnaces and hot water heaters. my property manager charges slightly more than most places for mine because they are nicer than most. i have found if you take care of the place, the students will as well, most students that destroy the places usually stay in the cheapest place they can find. i have had good luck with the students i have had for the past 3 years, and some of them have re-rented.

@Annie Li We bought it in the end of  2011, sold it in 2014, and i dont like to be negative, but this area will never recover, there is no chance for this area near Gary to recover, have you driven just down the block onto Broadway, you wont even have to go 3 blocks to see burned down, boarded and destroyed commercial real estate, tons of burn homes.