They had allowed two months to go by without paying their bill.

Adjacent to this bustling hub, affordable residential lots have remained available, particularly after decades of urban renewal and the city's efforts to address blight.

They're clearly not having to take any renter calls or deal with any issues. 

-your first few years after a purchase are typically a stabilization period, and you IN-vesting your money into the property. think about how long it will take to recoup all the costs i just mentioned.

I would pay off the remaining 416K by getting a mortgage and hopefully have about 100K in equity.Anyone have thoughts or holes in this idea?

For example, the cost of not doing a deal that you missed because you were stuffing envelopes or supervising the stuffer. 

How did you find this deal and how did you negotiate it?

It will go a long ways to help you deal with the issue and your tenants: https://www.epa.gov/mold/brief-guide-mold-moisture-and-your-...

Does anyone have any experiences with this company to share with me? 

Talk to your neighbors, get them on board for your project as the first step.