On the other side, as demand decreases, home values have to be dropped by the owner setting/accepting a lower offer. 

If it gets accepted, I'll be trading that one as fast as possible into something that generates cash flow by the time we close.  

This isn't acceptable at all.

@Dennis M.Always, the visionaries pay the price for economic and social short-sightedness.

If acceptable to the owners Bank/Mortgage company they may provide a cheaper policy in this situation.

@Ashley DavisGongrats on your deal...I would say you figured out the numbers so well...dont worry about the rehab...going with 50k budget is over already, If I were you I would the same as you did ... wouldnt worry about the numbers at all.I would recommend to take an experienced investor with you when you knock on the door...try your best to get them sign a document for cash for keys along with short term lease stating the date the move out considering to include in the lease that no repairs would be done by you and they accept it in as is condition...I would definitly consult an attorney to write it up for you...try to be nice but firm with the occupant dont ever get emotional when taking to them.Good Luck

., there's no way to get the deal to work out as a rental or a flip without a huge price concession -- something they're not likely to accept. 

So I have an accepted offer on a duplex where the bottom unit is currently occupied by the seller's son, who wasn't paying any rent at the time - I knew this before I made the offer.

I am a social worker with my MSW and my husband is a real estate attorney.

He claims he should not be responsible and refuses to accept responsibility for remedying it on his own.