My concern is that this gives them the power to start the negotiations.

My first concern is now clear as the sky. 

For their first purchase my clients wanted a safe "turnkey deal" the next project they are looking at will be a value add where can input the BRRR method and be on a path to building a large portfolio of rental properties. 

How concerned should i be that I can fix my drain but still have an issue if the other person doesn't fix it?

But if there was a going concern business that you wanted to purchase that consisted of both land/building and other assets you could 1031 your investment real estate into the land/building allocation for that business.

Foreclosures are going to owner occupants before it's open to investors, or they get bid up.No matter what route you go, you've got to creative, and the tried and true old school methods still work.

@Matthew KeeneyIts seems as if you are more concerned than your friend.

Also, with interest rates going up are you concerned at all with all of that leverage?

I did include taxes and insurance in my analysis.I think my biggest concern is getting it refinanced. 

If their concerns are legitimate, then address them.