Burn em.

One of them caused an electrical fire and burned out an outlet.

IF it was not on an auction site none of the information would be known unless you do your own research. they could say its a 3bed 2 bath home and you go buy and its burned down (seen that before). 100% is on the person bidding at auction.

This is probably the thing that burns out people who self-manage more than anything.2.

If you don't look at them before buying in person, you will get burned at some point and regret it.   

Please do both of us a favor, and write it down on a piece of paper and burn it.

If my house burned down and I was getting text and phone calls from people with unsolicited offers I would not be very kind to them. 

While this is a way to buy property for most they burn out in the first 6 months since its so darn hard to do it..

The overall LTV (including all 3 mortgages) will be key and your selling point will need to be that the 2nd mortgage ($8k) will burn off in 2.5 years (based on your surprise that it was even out there, I'd recommend that you follow up in 2.5 years and ensure that it's been satisified, so that it doesn't surprise you again in the future).Does the $8k grant vest over the 5 years? 

I've found that every time I've tried to get "clever" in my investments and pick the next hot thing, I've gotten burned.