. ($50k meaning all in price after repairs). 

Try negotiating the offer price to reflect the repair cost of the sewer line.

This is obviously a little simplistic as it doesn't account for utilities, repairs or capEx.But look at it this way: you have to pay to live somewhere. 

You save money by financing subject to repairs.

Right now, I would characterize myself in the accumulation phase, as I am essentially stock piling cash to be able to put down the down payment and have plenty left over to account for any unforeseen expenses (repairs, vacancy, etc.).My question is, where should I be keeping this cash?

One thing with Condos and Town Homes is the repairs are usually less frequent.

I remember when I was first starting, when a contractor told me about a necessary repair, I had no idea if it was going to be $500, $2000, or $10,000.   

If anyone knows the Virginia market, this property is located in Petersburg, VA in case that influences your feedback.I have negotiated subject to and owner financing to purchase the deal using the following structure: I will pay $8k in cash I will take over the existing $59k mortgage payments (28 years left) of $506.70/mo PITI paymentsThe owner will wrap the remaining $8k into a second 15 year mortgage of principal only payments of $44.44/moTotal monthly payment $550/moThe Deed of Trust will transfer to me at closingI will sell the property via Owner Financing to a tenant buyer using the following structure: Purchase price $85kPay $10k downI will finance the remaining $75k for 10 years at 10% interestMonthly payments of $1000/moBuyer may cash out anytime after the first 5 yearsTenant buyer covers repair costsDeed of Trust transfers when tenant buyer cashes property outBasically this strategy is a way to get all my money invested out of the property and avoid typical rental property expenses to keep all of the cashflow.

It will depend on what shape your property is in as to what you may have to do, you can always have the tenant inspection report come back with more things than you are willing to fix and refuse a request for repair, but that could put a strain on your relationship with the tenant if they continue to live there. 

In other words, have your own inspections, repair estimates, etc done (just like with any other purchase) to make sure the numbers work for you.