Sorry, I should have been more specific:The unit is under moderate rent control meaning that when vacant, I can raise the rent to anything I want.  

The moderators should consider some Greg S. ism's as although his comments are often brusk and not as "touchy-feely-polite-warm/fuzzy" as some people would like, they are often spot on and accurate.

You basically have 250K sitting there in equity doing nothing while many low to moderate risk investments could yield 5% , Basically it's "costing" you ~1041/month just sitting there with lost opportunity costs.

Carpets and drapes - "useful life" ruleNormal wear and tear to carpets, drapes and other furnishings cannot be charged against a tenant's security deposit.243 Normal wear and tear includes simple wearing down of carpet and drapes because of normal use or aging, and includes moderate dirt or spotting.

You may want to ask a moderator to move your post to a more appropriate forum or post it yourself in the right forum to get the best response from fellow BP people.

Price is nice and low, condition is fair, and rehab should be low-to-moderate in cost.

I'm thinking about starting off with homes either in the 40k range needing light-moderate fix ups, or around 80-100k  that are fairly turn key.

There is always greed, which is great in moderation, but again if you are happy with the tenant and the rent and you don't see any additional risk to your assets, whats the harm in having additional occupants.

I'm a bit disappointed to read some of the advice posted by  moderators / long-time posters.  

I would plan on exploring this from either Sheetrock wall on opposite side of opening up the wall from the tiled surface in the bathroom.You probably will not be able to keep the deposit in this case, and as you mentioned it was a 2 "flat" I am assuming you're in the greater Chicago metro and your L & T laws are very strict there.I would do as another post suggested and either have it repaired by current owner prior to closing to your satisfaction - meaning you are physically on the job site to witness extent of damage or lack there of due to water, or, renegotiate and ask for a concession for the issue - and this could be a moderately expensive problem depending on the length of time it has been leaking and given the possible location of the shower/bath to supporting wall etc should lumber need to be replaced.