They also like the tax benefits associated with ownership.I've taken both approaches and have benefited from each.

Tax implications?

Did you inherit this home with a step up in tax basis or will you need to pay taxes on any gains if you sell?

AssetsAsk yourself: Do I want cash that depreciates with inflation and taxes, or do I want to build wealth?

so, you're maxing out debt service which makes it tougher to cash flow.with that said, no matter the purchase strategy, you should always make sure you're using actual numbers, and not random assumptions.for example - some people will throw out '10% for capex.' 

Also, in order to get financing the lender wouldn’t allow SCI to dramatically overpay or they wouldn’t meet the debt service requirements.

If you've not read Debt Cleanse, you should.

Agreed - plus two additional thoughts:1) I always recommend having your CPA also review the drafted operating agreement for the tax issues. 

Are they going to start paying down that credit card debt, turn over a new leaf, and avoid bankruptcy for the next decade? 

That's including high Baltimore property taxes, expenses, mortgage, etc.