The soil is unstable and many older homes do not have gutters. 

That could be dangerous if the individual is unstable.

The site is somewhat unstable, and prone to crashing. 

It doesn’t apply to unstable properties.

@Bill Plymouth If my income is low or unstable, or the dept to income is skewed this can prove to be a challenge. 

HOA is probably unstable and fees may increase substantially.

The key here is the AREA.You say it's in town.I wouldn't count the rents in a better area of town.You have already said they have waiting lists and rents are higher in better parts of town.If I was a renter I would pay more to be in a safe place as well.When you have low income tenants you have more turnover,problems,and damage.Many of these tenants are unstable sometimes mentally and job wise.Their life isn't stable so neither is their income.I am not saying this to be the case with all low income tenants but based on averages this is the case many times.You can price in the risk for this property.I wouldn't pay 178,000 based on what you said just because of the area you describe.Plus the other units you have to dump in immediate cash to get them rent ready.On the utilities if they are not separately metered then don't spend the money if tenants are used to utilities included.They will just go down the street.You have to get right down to the heart of WHY this property has had so many problems in addition to just it's location over the years.Have you pulled a crime report for that complex??

However, risk remains very high due to an unstable real estate market so the spread on a risk adjusted basis is very unattractive.

If the soil is unstable or prone to expansion and contraction the slab could crack.

I've been thinking about getting into mobile home investing for about 6 months now, but my job was a little unstable at the moment.