Account Closed most of the time I find water or moisture in a basement it is caused by impropper irrigated surface water.

I realize this isn't ideal and will experience higher vacancy than normal.Price $80,000Loan amount $77,200 (3.5% Down payment)Payment: $414.43 (30 year, 5%)Monthly Rent $2000Expenses: $1000 NOI $1,000Payment: $414.43Cash flow: $585.57I have not calculated PMI or Insurance into the numbers yet.On the surface, the numbers seem to work.

I will know more on the condition of the units and the building next week, but on the surface this seems like a logical deal.

o Drainage: does water drain away from house, or does water pool by it?

I would be careful with this property, on the surface it seems like a deal, but the fact that the sellers are having trouble means that they are too high and you may be purchasing too high if you offer $225k.In your situation I would offer as low as possible and have them counter you and negotiate from there.

@Shawn Loftis most likely the problem is exterior drainage.

Most tenants although on the surface appear to respect their landlord they all resent you to one degree or another and will always place themselves first.It took me nearly three years and many thousands of dollars to get rid of my first professional tenant (inherited) and since then I am 100% professional in operating my business.

The appraiser will walk through and check for hot running water, proper drainage, turn on the heater, verify there are smoke and CO2 detectors, make sure there is no peeling paint, etc.  

Roof, Hard-surface floors, Mechanicals cost me $90 per month vs. paying cash for these items in the next 5-7 years... 

This street drain has a large (probably 3 feet in diameter) culvert that runs right under the property to a  large concrete drainage ditch behind the house.