This Summer we are scheduled to have the facade repaired & painted (black trim).

Additionally, the old aluminum siding on 3 sides (the front facade is new vinyl) has damage but I've not had any interest in redoing it as, in my humble non-insurance adjuster opinion, it is not going to add any value for my rent.

but to address the improvements that need to be made and such, Its my expierence that the selling number does not matter to the seller as much as the "net to seller" so even though they want the $800K theres always room in there to ask for closing credits to address the things you are seeing on the facade of the building.Additionally if you are worries about inheriting a vacant building or the whole building going vacant in my mind then you are analyzing the entire building and area as an investment, so what is the population trends, for that area, any data or comps on that asset class as far as per sf rents. 

We upgraded our to gas logs, made the cavernous opening smaller, simply tiled over the horrendous facade, then added a reclaimed fireplace mantle & a slightly raised hearth.

If the front facade is salvageable, if the utilities operate, if there are curbs and gutters all those have cash value that a lot doesn't offer.

Brick facades last a very long time & foundations are very strong as well. 

I intend to waive the minor inspection items (such as creaking floor, handrail bolts, etc.) but I was hoping that the Seller would be able to repair the following list of items: 14012: Replacement of decayed siding as identified in inspection report (at southern façade and above the evergreens around entrance).

The second question is, what are the risks associated with this type of installation, where the vinyl siding is installed as a sort of facade on the home?

Also, you can NOT EVER demolish any structure (or even a portion of a structure) that is considered historic no matter how dilapidated it is unless you intend to re-build it exactly as it was (especially facades). 

I like the way it looks now, the smooth tans, the overgrown shade trees, the modern facade, and a three car garage, it looks rentable and peaceful (a nice HOME vs a house).I did a mockup for you, mainly focusing on a varnished gate, varnished front doors, less mature plantings and getting rid of the big dirty (sap dripping) pine tree over the left driveway (so it would not drip sap onto the new BMW=7 Series in the pic).These kind of things would fit in, in an upscale area, but not necessarily be better, just different.It looks like a nice house for entertaining, lots of parking.