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.

I would like to put down as little as possible to have more reserves and comfort for the big $350k rehab needed.When talking to the seller, he seems very tired of dealing with it and collecting cash door to door each month.

I have an engineer that does phase one, site inspection, and cost reserve stable for one price.Cost for everything above is in the thousands on average.Even if NNN with no landlord responsibility we still get the inspection as part of DD process.If the tenant doesn't renew it is important to know right before the option period kicks in how much life is left on roof, mechanicals etc. as in addition to the TI costs to re-tenant you can get hit with a lot of other capital costs.Lender is going to order a PCR site inspection report whether the buyer wants to or not.

There is not usually a lot left over due to getting caught up from the lean months.Plans: Re-establish the emergency fund but boost to 6 months reserves. ($2000 x 6 months= $12k,)Try save up to 10% gross of my pay check after the $2k budget is met then put the rest into debt reduction.Find somebody I can work with/for in Real Estate Investing to learn hands on and observe their methods.Use the 10% gross savings to invest in a property.Get free of all debt but business and eventually be able to go all cash as it makes sense.Establish at least 3 other streams of income (preferably 5) so we are not reliant on my commissions to meet the budget.

You will need strong liquid reserves to overcome your credit and experience.

do they confirm that they know the property is transferred and you are the new owner.

In this business, you must have reserves, reserves!

What reserve percentages are you using for vacancy, repairs, capex, management, etc?