To start we are offering an 8% return compounded annually.

However, if you make a mistake, it can compound your current financial problems.  

May differ in your area.If you can find buildings that truly return all of the purchase price in 3 years of profit (non-compounded!)

The last house I had under contract, the brick facade was bowing out in the middle (3-story house, bricks were bowed out several inches at the 3rd floor line) and the listing agent said they had a contractor look at it and it's fine.

Its the long time periods and compounding that produces the impressive results.Further, that comparison neglects all the interest, taxes, insurance, routine maintenance and significant upgrades that have to be done to actually have a half million dollar house.

For example, if you start with $10K right now and can add $10K each year, and are able to generate a compounded 15% annual return on everything invested, you should be right around $160K in 7 seven years.

this past year, being at a new job, my bosses opened my eyes to the world of investing and compounding interest. 

You could even let it compound to make it more attractive.Just make sure you present a well documented plan with your request.

Home B owes $2000 and the value is assessed at $150,000.  

I recently purchased a home on the courthouse steps and it had horizontal cracks the full width of the basement with a 2-3" bow in the wall.