I have had some reservations about getting started in the past but I am finally breaking out of my shell and realizing that there is no time like the present. 

You simply have to be the highest bid, meet their undisclosed reserve, and show the ability to buy, either a preapproval or cash for the purchase price.  

Reserve fund, any assessments or foreseen assessments, cc&rs, - including any rental restrictions.

We hired inspectors who confirmed that we had bed bugs.

I'm not too worried about expediting even though I may be making an offer before the LLC is set up since I've confirmed with the bank that transferring title to the LLC will not trigger a due on sale clause. 

Financially I am in good shape, have enough in savings to cover the down payment but would rather not use my own cash reserves just in case.

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My situation is a seller wants to sell her five-unit and fourplex, but her asking price for both would leave my reserves too low.The five-unit has a lot of back taxes owed (no mortgage) and the fourplex has overdue mortgage payments (no back taxes).

I've done this exact same transaction (even R/M in default) many, many times in the past.Since you need a seller with CPA's (capacity, powers and authority), your title insurance company will list their requirements for your seller.What we do not know is if your seller must get sale confirmed by court. 

You are paying it in cash flow and/or reserves if you loose your tenant and have a period of time with no rent.