But I would not consider what the seller needs to make in determining what I'm willing to pay for a property, especially when youre buying a problem like this.

Get them to give you an idea of what they are paying for party /event space now in Amarillo and if they would sell your venue for you.

what would be the justification for paying that much?

It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees.

Regarding your other questions:  - If the going value is $260/SF, why would you pay more than that?  

I was studying the market and my rent will be just enough to cover the mortgage and HOA fee now I might to pay out of pocket for insurance but don't want to sell it yet because the area is growing and might have good appreciation in the years that follow.

I obviously want to pay the lowest taxes over time.

I started out with a house hack, and I would say that that was definitely safe for me when I was in college as I could afford the Mortgage even if my renter didn't pay.

Somebody somewhere had to pay for that real estate at some point and has continued to pay for it since.

Section 8 pays $1,590 for a 3BR unit.