They are asking for mediation, even though its not their primary residence, and they have let a hole in the roof really damage the building, coupled with not paying taxes for years, we saved it from tax sale and asking our attornies to dismiss the frivilous mediation request, which has stopped our foreclosure in its tracks.So, its painful in judicial states, and less painful in states like AL & GA.

If it produces more energy than it consumes then the building is Net positive - though Net Zero is too frequently used as a blanket term to cover both these cases.Ironically, Net Zero does not automatically imply higher energy efficiency - there are several examples of commercial buildings with large expanses of flat roofs (i.e. warehouse) which are net positive, despite the building itself being horribly inefficient.Building standards in North America are woefully outdated on matters of energy efficiency.  

Either you or a representative you trust with out exception must perform all the necessary due diligence just as you would for a property down the street from you.Turnkey companies want to maximize profit by doing as little work as possible using the cheapest materials.I would have a professional inspector check everything with a fine tooth comb,especially the roof,plumbing,electrical,and HVAC systems.Also make sure you get a repair warranty for when things go to hell in two years or less(and they will).I honestly don't trust any property I don't rebuild myself with my trusted contractor and quality materials that will last at least a decade or more

Sometime it also covers roofs, but not on this property.   

If anything we can call this practice : )Property is a side by side all brick duplex, newer windows and roof.  2bed1bath 800 sq ft separate basements and all utilities are in the tenant's name.  

Here is a part of the letter, I sent to the seller:The home inspection was completed on September 29th (please see attached) and the following issues were pointed out: 1.The wooden floor frame in the middle unit is deteriorating due to either prior water leak in the bathroom or due to moisture infiltration through the walls and foundation.2.There is evidence of significant settlement under the middle unit bathroom and north closet.3.The settlement of the floor and walls has also resulted in settlement of the roof frame above this area, ceiling shows cracks.4.There is an obvious depression on the roof – water is ponding on the roof above the middle unit, which adds excessive weight on the roof and potential for leaks.5.Asbestos containing material has been found.6.The current bedroom heat installations in the north and south units pose a safety hazard from carbon monoxide, fire and oxygen depletion.7.An electrician performing upgrades did not use ‘arc fault breakers’ in the north and south unit breaker panels, which is required by the national electrical code.8.Upgrades to the electrical system, promised by a real estate agent, have not been completed yet.

, what if something breaks i.e. a roof leak while the tenants are in there, who will pay for those repairs?

Now, you didn't mention CAPEX (expensive items such as roof, HVAC, hot water heater, etc.). 

We ended up having to do a lot more work than expected (including a new roof, water heater, pulling out ceilings, etc) and also did some work that wasn't "needed" like insulating and replacing the ceilings of the top floor. 

HVAC service call for no heat/air or plumber to fix leak or regular grass cutting) and it also assumes there are no capital expenses ever (ex. need to replace water heater or furnace).Looks like there's plenty of a cushion to account for those things, but 35% is if everything runs perfectly forever which isn't going to happen!