Focusing purely on the numbers.Opportunity Cost of Renting: No AppreciationLet's start by understanding the concept of appreciation in the context of real estate.

I just don’t understand why they would allow water to sit in the obviously warping floor for months.  

I would recommend you find a fire restoration company/contractor to walk the property with you and give you a good understanding as to what needs to be done.

From my understanding the brokerage they get their insurance through is rejecting the property because they believe the property to be high risk. 

Hey Josh, yes this “odd property type” will give formal banks a huge headache. 

 Odd to me -  if it is a foreclosure auction you bought them from them what did they foreclose on to begin with?  

the way section 8 works is different in every county across the US and I have been diving into the matter myself for an 8 unit I am considering putting into section 8 in St petersburg Florida.. but from my understanding you would ask whatever rent you are hoping to recieve and the tenant will tell you what their TTP or total tenant payment is and the county is responsible for covering the remainder of the lease as long as it is beneath their FMR fair market rent.

I think that you would have to understand what you are trying to accomplish before discussing compensation.

Know your risk tolerance and understand the situation you are putting yourself in.

At some point every house needs a new roof, new plumbing, new windows etc, so it is critical to understand how much money you have to budget for the next 10 years.