The house was north of Detroit and I had no money to fix it up but I did manage to make it work as a rental until the housing market collapse which did not end well.

The garage collapsed on the car and the fire department had to extricate them.

There could be a clog, or it could be a collapsed sewer pipe. 

Scary article, but good info to know. http://www.businessinsider.com/15-signs-that-the-us-housing-market-is-headed-for-complete-and-total-collapse-2010-8

If you're that big a risk taker, take the money to a casino and put it on red.If you're roof collapses and your furnance dies, where are your cash reserves - then your tenant (who will be a pro at this in poor neighborhoods) will withhold rent for unacceptable living conditions.Be careful and stay away from sales pitches.

Since your post in March, our property values are still increasing despite the oil price collapse. 

Built a stone house on a straw foundation and it collapsed.  

Eventually the house of cards collapsed and nearly took the global economy with it.

And of course he couldn't sell it.The garage collapsed (termites) and the owner got a BIG code violations fine from the city.He was desperate to get rid of it.

Meaning if OP buys said purchase option for $3500, and then discovers a collapsing foundation, she doesn't get that $3500 back?