I bought two SFR is Desert Hot Springs (years ago). 

Also, the water could have entered from other areas and traveled along a beam and exited the kitchen ceiling.

If it is, I would do whatever I could to get good paying tenants in there right away,  If it is vacant, you are going to be running through cash like water through a sieve. 

We are local contractors in the area looking to get our feet wet in the real estate investing waters.

I got a very good price on the building (about $25k per door), but it was a ton of work as in addition to tenant issues, there was TONS of physical distress (foundation repairs, sewer line and water line repairs, electrical upgrades, new roof, and apartment renovations needed for all units). 

So at the end of the 5 years, you are just treading water with the lower price point home, while you made headway with the other one. 

If you have a 6 bedroom in an area that does not have a university (students looking for shared space) or is in a family friendly place it may sit vacant longer between tenants.For Capex, try not to use a generic number - look at the roof, furnace, hot water tank, kitchen - when will each need to be done and what will it cost?

However, if for example, the company did not install or disconnect the washer and dryer correctly (such as leaving a valve on) while water is turned off prematurely, causing damage, what language do you put in the Lease to also hold other parties accountable such as ALE and appliance install company?   

Im not a lawyer, Id flip that house though. maybe get the priest to come throw some holy water on it. 

If I buy a house for $400k, and the market drops and the house is now worth $300k, I am under water.