I previously founded an automated building-code compliance startup, so no shyness around the thorny stuff :)And I appreciate everyones helpful (and patient) responses - getting normalized into a new industry really helps with support like this.

If it were me I would be patient and look for a deal.  

Get a lock box for the contractors and let them lock up for their safety. 

But you will need to be patient and be willing to move to other areas of Dallas/Ft.

But safety is another story. 

Key thing is to buy with a margin of safety and understand that state regulation is not likely to favor the smaller landlords like yourself / myself.Decent management will be your secret weapon.

You can get a duplex and house hack or BRRR if you are careful and patient.

Investing in real estate is a long game, so be patient, build networks, and be crystal clear on your goals.

I would think you would want to replace it, especially if you are doing the expensive part (replacing drywall) already.On top of the safety concerns, insurance should be way cheaper and easier to shop around with updated electric.

The sellers have agreed to give credit for half of the safety &  health related issues/repairs but only wants to cover the septic replacement with an escrow account as they're hoping that we'll handle the replacement, get reimbursed by the Department of Environmental Conservation/ Catskill Watershed Corporation (CWC) and refill the escrow to reimburse the sellers.