When I find this out I think it indicates a seller needing OUT.So I ask  you, even though there are many of these houses in the higher price ranges, do you think the price of $300 K to about $1,5 mill is to high to make a profit ?  

The subject property should should be right in the range of those properties.But in reality, This almost never the case. 

I can see water damage in the drywall coming from the bath locations.

I have a client looking at a 12 unit apartment building, 12 stoves, 12 fridges, 12 dishwashers, 2 large water heaters, 12 garbage disposals.

Total cost      Monthly cost A/C unit (replace every 15 years) $8,000 $45 Roof (20 years) 10,000 42 Carpet (10 years) 3,000 25 Dishwasher (10 years) 500 4 Range (13 years) 700 5 Water heater (10 years) 1,000 8.5 Microwave (10 years) 300 2.5   Maintenance/repairs (minor) 125 Total   257Mortgage, insurance, taxes                            960Total expenses  =  $1,217/monthRent = $1,350/monthCash flow/month = $133

Most pundits project the front range to continue to grow in population.

Now days, if you're looking in the 300k range, unless you're a disabled Vet, that freakin crushing 3+ points in VA Funding Fee for a "multi - user" borrower, which gets stacked/ financed on top of the loan, that you also pay interest on too, is not always the best way to go.I just started following the Military Investors on BP as prior I haven't ventured out of the Florida Real Estate Q&A forum on BP. 

One Idea i had was disconnected this water line from the upstairs bathroom so that the only functioning  bathroom would be downstairs?

Have done 4 low end flips in the Bay area ranging from 600/900K.

Let me run a scenario by you... and here I'm just playing devil's advocate I'm sure you're already frustrated with this individual and sounds like you've already made up your mind.Scenario #1 tenant breaks shower door:Tenant doesn't disclose to you that they broke it and moves out only to leave you with a large amount of water damage AND a broken door.