Your in CA, do you have rent control in the area? 

@Cassidy Burns I think it depends on how much control and involvement you want in the particular deal.

The current owner has proven on paper that he can not control costs and can not keep tenants, so why would I offer more than this?

My concerns would include 1) crime, 2) proximity of other buildings you don't control, 3) (local) apartment supply analysis, 4) scope of capital requirements, 5) rehab grants/funding, if any, available 6) loss run report @Patrick Madigan I am in the Fuquay area for about a week and would take you up on visiting the property if this Friday or Monday next week....

You need to retain control of the deal if you are going to manage it.

After my own due diligence, not only was there NO cap rate, the NOI was actually negative with no possibility of increased income because of rent control.

Including roof or exterior, since obviously the HOA is not in control and has no capital reserve.My question is, how is this going to affect the future sale of the townhome?  

Do you have anything about pest control in your lease?

Bamboo can be controlled, is there a black plastic edging around the area that it is in ?

Then you can control how the funds are invested and put them to work in real estate, private mortgages, etc.