As @Patricia Steiner said, in my state, an "As-Is" contract allows the buyer to walk away for any or no reason during the inspection period, while the "Standard" contract allows for the seller to remedy certain items to "working condition" and does not necessarily allow the buyer to back out scot-free.If you aren't sure of your contract, consult your Attorney, Realtor, or title company for some direction. 

But now we’re trying to decide if it’d make more sense for us to start with the BRRRR strategy on an investment property first and then look for a multifamily primary residence later given our situation and the market conditions.  

I calculated that the ARV is $450,000 and that the repairs would be $100,000-ish - it doesn't have city water, air conditioning, or working appliances.

It is a bit tricky of a situation, as the previous owner gave me the lease he had created with the tenant, but did not have a move-in document showing the condition of the unit.  

My best advice would be to look at similar homes in the neighborhood and estimate what your ARV would be based on those homes and their condition, and work backwards to decide which updates will bring the best value increase. 

I haven't really thought about that as I have never done any type of rehab work - So my intentions were to buy something in relatively good condition and rent it out right away.

Just remember, repairs of roof etc will be needed down the road unless in excellent condition.

They had explained that one member of the family had a diagnosed condition which would benefit from a service dog (sorry to be vague, but I'm not sure if saying the actual diagnosis is illegal).  

I think everything you mentioned @Chris Seveney about the risks with value, condition, borrower difficulties, and potential lien/title issues nailed it. 

It all depends on how much leverage is being used, what type and condition the properties are in, and what submarket of greater Orlando you are looking in, etc.