You will be investing considerably more time and emotional energy going that route, especially if you want to self manage.I'd say that $10K is the buffer you need on hand to weather a bad eviction/move out or other catastrophe, so might be cutting it tight financially.

I'll admit I wrote the first post with my emotions only bc it was a deal i had lost to someone else.

You have to factor in vandalism, squatter, eviction, market trend, foreclosure, local authority citation, legal & HOA expenses to make it work.For too often, I see people bid up the property due to emotion instead of reality.

On the surface, it just looks like you will be paying fair market value as-is for your own personal residence, so your emotions may get in the way of whether it is a good "deal" or not.  

That brings a 3rd party into the game, who has no emotional entanglement with the BIL and the seller might not have to go to court.

His contractor told him that they could erect a temporary wall, knock down the bad material and rebuild it.

From RE Newbie to RE Tycoon, from Bird dog to Apartment Block Owner there are a range of Insurance requirements just to do business and also cover the temporary or permanent ownership of the property.

If it dips at all it will be slight and temporary as even before AB284 stopped NOD's, inventory was still decreasing monthly and demand was still growing monthly.

Also the temporary owner had paid $16K around in January, so I am thinking it looks like the owner financing fell apart or something else?

I think this lack of inventory is temporary and will revert back to the inventory levels of last year.