We will underwrite the building using solid/conservative information on gross income (what are market rates, can we raise rents over 2-3 years, what reno needed to get to market, how do are units stack up compared to others, what is market vacancy, etc.), what we can achieve not what the current owner has done.   

I said I thought the property was a decent deal (asking 96k when comparable houses sell for 130-140k).

I've checked redfin/zillow the usual and it looks like the real estate is pretty cheap out there comparing to rental ( 30k house going for 650m). 

Generally, the biggest challenge is a lack of quality comparable properties.

Note that this was before Al Gore invented the internet (LOL) so info availability was in the dark ages compared to now.

and next how would the rent you lose out on by not renting it out compare to what it would cost you to live somewhere else?  

Of course, we will be having our local lawyer take a look at the lease.I'm hesitant mostly due to the overwhelming legal power and experience that this tenant would have compared to our small LLC.

Especially as it compares to finding a move-in ready 2-4plex that will cash flow. 

You can compare them and come up with one that covers all your bases.

It doesn't look to good when compared to other investments.