City recently did a building inspection and we noticed the tenant is smoking in the unit (cigarettes and marijuana), food waste everywhere leading to building pest issues, and there are 5 people living there now (3 adults and 2 kids).

Although I conducted a basic septic inspection during the closing, and the system is in good working condition, it still failed the STR inspection.

A 100-year-old home with structural concerns could mean costly repairs, so get a thorough inspection, especially for foundation and floor issues.

Hi Renata,To gain a clearer understanding of the overall condition of the home—including plumbing, electrical systems, HVAC, and the roof—and to identify any major issues such as asbestos, water damage, mold, foundation concerns, or wood-destroying insects, I strongly recommend having the prospective properties thoroughly inspected.

When I do find one I will let you know about inspection. 

It was a bit of a gamble, but the inspection report came out great.

I'm also getting my inspection license and getting my PMP certification.

It's very likely they saw the inside condition of the unit before you purchased it and they have the right to inspect.

Once we had the home inspection I was able to have the seller credit us at closing $8k...of which the escrow could not credit the entire amount and so I had the seller write up a personal check for $2000 How did you finance this deal?

Did you discover the issue during the inspection period?