The City would not let you do any of these things twenty years ago and now its Wild West for the builders with no, none, nada improvements in the street for sewage, sidewalks with curbing and especially parking and storm drainage.

When I reached my hand in the hole, I found a 2" 'channel' about 12-16" below the surface just Pouring water into my fence post hole!! 

To fill voids due to uneven surfaces so that the backerboard will not have deflection and bounce if the fastening system is not 100% capable of eliminating movement.

Your seller has some life issue where his finances become known, divorce, bankruptcy, he becomes incapacitated, he dies, he goes to an attorney to buy another home and he mentions it, his taxes are audited, he tries to refinance his mortgage and it surfaces as an asset, he attempts to qualify for any government entitlement or benefit, he talks to a Realtor, he hears about selling notes for cash and attempts to do so.....I could go on, point is, you can not hide what you did, it will surface someday.Statutes of limitations vary, but fraud is universal in that the limitation begins upon the discovery of the fraud.Welcome, "you can check out but you can never leave"......without paying:)

A few telltale clues incline me to believe that it's original construction and if so, the surface underneath is likely to be 1/2" drywall (as opposed to an older home with plaster).You can check for sure by simply removing an electrical plug or switch face plate and looking at the wall material.As @Russell Brazil pointed out, when overlaying the walls, there is a lot to consider in how the additional thickness impacts the existing trim.  

We had to replace all floor coverings (all rooms had cigarette burns and permeated smoke odor into the carpet and pad, had to clean-seal-repaint all walls and ceilings, deep clean all cabinetry and every surface in the unit.  

If its the same (usually cheaper), I would look into Corian, I'm particular to sandstone because it hides damage well and if there are scratches you can just sand them out and you have a brand new surface, then if there are major problems they can typically fuse in new material.

I just wanted to point out that we don't have enough info on the numbers to judge, even though on the surface it sounds high (74%).

On the surface, it is easy to raise red flags when looking narrowly at some factors, such as cap rate, impacting the market.

The idea Bill offered of working with a local MO seems on the surface to be great but their are 2 issues with that.