I think investors who are simply comparing the difference in cap rates between investing in California market and the Midwest are making a mistake. 

Partial rent to "compensate" for the sewer issue is not an optionThat's your angle...As soon as threats of lawsuits fly, then hire a lawyer and let them do their job...no more contact with them except through the lawyer.You aren't going to WIN this situation...best you can do it stem the $$ damage and move on...fix it and sell it off..... lesson learned

Going after both absentee and Seniors with 20+year ownership could prove to be a big win.

I had personal friend lose 2 shopping centers in Denver during those days... insurance company foreclosed.. simply not enough rent to cover debt service and he would have to cut 250 to 350k a year checks to keep them he did that two years and folded..

We simply show them situations like this & they hop right on board. 

It has been often suggested here and elsewhere to pursue something that keeps a toe in the water of the working world, as it limits the downside risks, and could turn into a fruitful enterprise for post-retirement.At the request of a friend and BP associate, I've been asked to provide expert opinion and electrical analysis on residential properties that are either on the market, or recently sold through his brokerage, as there are many customers who want a deeper look at their electrical system, deeper than what a typical home inspector will do, but they are not ready to ask a contractor to come out and simply give a blank check to 'fix whatever's wrong' (famous last words).

If there are a bunch of liens or Lis Pendens , then you may or may not want to proceedAlso, find out how much they owe and to see if their are 1 or 2 mortgages on the property.You can usually determine how much the seller owe by simply looking at the amount of the mortgage, the date of the purchase, then use a rate of around 4% to 5% and do an Amortization Schedule of the months since the mortgage was recorded.  

I tried a few times and it was uber frustrating i just never went there again.. and being an agent representing a buyer it was painful.. your buyer is e mailing you everyday wanting updates.. listing agent wont communicate becasue they are swamped and have nothing new.. it was very unproductive way to sell inventory.. but we had to remember this was a crisis and banks simply / and servicing or asset managers simply did not have the man power to deal with it all.. 

Current owners said they get a form from the county so often to help with reassessing the homes but they simply discard it.

Stated simply:1) become an expert2) go Dave Ramsey, spend less, earn more, build up funds to investStarting by house hacking using an FHA loan is a good goal.