I visited the property maybe 7 years ago, but was not making any observations about the REI market in the area of the condition of the home at the time.

Just my minor observations in this wild world.  

I am trying to avoid payroll, insurance and the other things that come along with it but once again I am not on location during the day when they are work to observe their work .they are not doing anything that would require a license such as plumbing or electrical

Questions I am looking to get addressed: General feelings and observations about this deal and the points I've made?

Make an offer based on what you observe, however that may be.

As has been mentioned on this forum there are certain liens that do not get wiped out at tax auction.Go to severa tax auctions and observe and talk to bidders....you will learn a lot.Many of the people who bid at tax auctions and you think they got a deal have done no research and when they go to get title insurance can't get it because of liens that are still on the property.

One small observation note.

Rather, that buyer will lose his shirt while I stand by and observe his demise.

I'm acting as GC, managing the major subs (roofer, plumber, sheetrocker, painter)Some of my observations that I didn't foresee in all my reading and research leading up to this:- Handymen NEVER call back. - Small jobs are more frustrating than the bigger jobs.  

I also don't think comparing what's happening now (in your observation) to what was happening in 08/09 is the most apt.