No no, Mike, nothing to worry about, he assured me.

I called my landlord and he assured me everything was okay.

I just recently received a copy of the Latest revision to the minimum PA seller's disclosure form from the State Real Estate Commission (it is not published yet since it requires one additional approval), and I can assure you that buried oil tanks are still an item listed in that seller's disclosure form.

Now, if you gave me assurances that the Scenario would hold true for 25 years, I would pick #2 based on the numbers.

Leverage turns what would be 3 houses paid off into 50 houses paid off.I love what @Al Williamson is saying, but I can assure you there is not a house or multi unit for sale in town that will produce $400 cash flow per month. 

The property is valued about 300K over that.It needs some roof work, which the seller assures us falls under the warranty of the installer.

The RE agent worked closely with Citi and the Citi contact assured him that the short sale would be approved.

From that point, you can also hire a Feasibility study consultant to give you further assurance before moving forward. 

I just needed assurance!  

Also, if you are going to be consistent in the flipping you also might want to consider a professional bookkeeping service as well to assure tight paperwork being presented to your CPA Advisor.