Problem is the area is one I don't like, bleak job growth, low class, challenging tenant pool and needs really good, strict management.

I have noticed some potential low cost rental properties in my area for purchase.

Thank you, that was an extremely helpful response!

The real reason was long-term low interest rates.

If they stay low a long time and you take the money you save and use it to pay down the principal, you may have made an excellent choice.My opinion is most people are better off with fixed rate loans.

 $42,000 is not all that bad, I see some comps where other investors are buying from providers I have never heard of in the mid 50's ' low 60's.  

Or did I do the right thing by lowing my offer due to the work it needed.

I am not sure if this is the right number to use this because one of the major advantages in the subject property is it is 7 minutes from a major train station that takes people into New York or Philly and this is extremely valuable.

I agree with the previous poster: The sooner you can move up into >5 units, the better....UNLESS you want to use FHA/Fannie/Freddie financing (low down payment), or unless you want to live in one of the units.

A lot of them are extremely laid back and definitely don't have the sense of urgency most "mainland" investors are used to.