If they’re underfunded, you could get hit with special assessments.Not sure about the exact contract with the tenants, but I assume if there is any additional assessment, it would be tenants’ responsibility.Since you want to stay local and focus on cash flow, commercial makes sense, but have you considered industrial or flex space? 

In addition, if this was originally an owner occupied house, there are often homestead exemptions where the first  $XX,XXX. of the value of the home aren't taxed.  

It will familiarize you with the basic terminology and benefits.

So, if you put in 20K, you could set the bid up to the amount of the 100K total debt(80K existing + 20K additional) to ensure that the property reverts to you as the lender.

Even if you only averaged 2.8% appreciation annually, which if you've had it 20 years I have no clue how that's true given prices have well more than doubled in that time, youre skipping over the fact that you have been benefiting from that appreciation on the ENTIRE house, not just the % you paid for.  

In addition, they are bearing the risk of you backing out of the deal and them being stuck with vacant units not bringing in rent. 4.

It solves the problem of expensive housing, makes the employees available if the business needs them at any time (with overtime benefits) and eliminates the commute. 

I’d recommend a consultation with an attorney specializing in these, in addition to an accountant.

Additionally, I am beginning to believe you don't live there to be the "house monitor" as this seems to be going on for a time period. 

I know of all the benefits that come with real estate but it seems like if you break even with 20 percent down, those are similar returns to just putting that money in the S&P 500.