Also I strongly suggest reading a couple of books, filtering the forums for discussions directly related to what you're trying to do. https://www.biggerpockets.com/forums/12/topics/318235-double-close-funding

I did not know that every pipe burst or split or that it was not winterized and that the main water line to the house needed full replacement. 

Keep in mind that the seller is going to try to get out from the property for a reason, just ask a question and listen, if he's motivated enough they will reveal more than needed OR they will not have enough selling points which could be a bad thing. ie; vacancy rates (leads to knowledge about the area or housing issues the tenants had), water usage (potential plumbing issues), appliances held in the units (leads to how old the electrical is in the home) CHECK IF THE OUTLETS ARE GROUNDED !!! 

The owner pays water, garbage, sewage currently.

I think the utility is Los Angeles department of water and power. 

You could have a multifamily where you pay heat, electric, water, garbage, lawn, snow and repairs happen every month, with vacancy once a year.

Some were single moms that worked crazy hours to stay above water and kids were left home all day.

They felt too under the water in California and could barely pay for their school loans while living with their mother and pretty much didn't have a real chance to get into real estate while living there.

- anyways my research indicates that the previous owner had an unpaid water bill of 15K that went unpaid and the city cut off the water, tenants bailed, and property went in to foreclosure.

Ask a real estate attorney for the state you are considering.But, here are some costs:Unpaid principalArrearslegal fees of the pre-foreclosurehome owner's insurancemoney to the seller for movingmoney to the real estate agent if one is involvedtitle insuranceescrowpre-paidsunpaid property taxesunpaid 2nd loan if it existsunpaid electric billsunpaid water billsunpaid gas billsunpaid mechanics liensunpaid fines for city violationsdeferred roof maintenancedeferred maintenance in generaldumpster to get rid of everything left behind