Thorough research of your project’s financial and architectural design constraints will eliminate costly assumptions and guess work by uncovering facts, establishing construction costs and a realistic project budget.

My assumption is that no rehab work would need to be done so I would be buying a turnkey property with a conventional loan.

My assumption is that no rehab work would need to be done so I would be buying a turnkey property with a conventional loan.

Take one deal at a time don’t fluff your assumptions and lower your assumed expenses just to make a deal work, don’t let emotions make a decision for you.

Making that assumption, you appear to be in year 2 so that means you have a 3% prepayment penalty.

But based on my assumptions of income/expense I'd be willing to pay you $x.  

Do not pay the collection... that can be seen as an assumption of liability and a paid collection is still a huge blemish on your credit. 

Since the stock market is a near-perfect market the assumption is that you must trade off risk for reward.This relationship does not apply in real estate. 

I would add that the age of the property is completely irrelevant and no assumptions should be made.

I think your assumption that the buyer is trying to limit their up front costs is correct.