Zach -- I used to be a proponent of 529s (and still am for family members to contribute to your kids' edu funds if they are able and inclined); however, I would suggest considering I-bonds for your own personal 'Coverdell' account building.  

If this were a year ago in hot seller market I may be more inclined to eat some cost myself, but market sentiment has shifted in many locations.

Create a win-win for them so they'll feel more inclined to help.

My goal is to buy as many more units as possible at the low prices, I figure three years until the market stabilizes and 5 years to start inclining significantly.

You have a lot more experience than I do so Iḿ inclined to listen to you when you say the deal is too good to be true, but it seems like the consensus is that at face value the deal is good enough to try to start prospecting to find some buyers.

I have lived in the DC Metro area for just over 2 years, and thought that it would be a great opportunity to invest bc rent is stable and property values do not seem to bubble as in other areas, but consistently incline. 

They may be inclined to sell to another investor because they can keep the property rented. 

THEN I'd be inclined to agree somewhat.

Aside from listed "problems", I can think that some negatives *may* be that:It may be on low land/inclined to flood/poorly graded propertyIt would *definitely* be hard to commute into town in the winterThat being said, you can over come those hurdles by looking for tenants who want to be near the River trail, yacht club, and state park.

If the conditions are as he described, and if all he wants is to be released from his lease and have his deposit returned, I'd be inclined to accommodate him.More facts are needed.