Is this legal?

They are not meant to be and have no legal responsibilities to be your eyes and ears. 

I find that selling owner user commercial property with 20% down and owner financing the balance is quite easy and usually results in at least a few quick offers.  

For conventional financing, condos need to be 'warrantable' if the condo or HOA doesn't meet those guidelines it is 'non-warrantable' and there are alternative or Non-QM (non conventional) lenders that offer financing.

Can anybody offer insight for which things to be mindful of as part of our due diligence before purchase?

In the industry this is most commonly known as a "Fix and Flip" Loan.We are correspondents with dozens of lenders who offer this type of loan.Most commonly, the loan will cap out at 75% of the ARV (But Investors do need cash, this is not a 100% financed transaction)75% has to include the purchase price and the rahab amount requested.The terms can vary greatly.The two most important areas that will impact the terms the most is 1.

Keep in mind that no agent can win you a deal if your going below asking price and they have several offers at or above ask.

Once the 5 years runs out you'll have used up your existing available depreciation but you still get to write off other expenses such as maintenance, property management, legal fees, etc.

Actually, looked at a $2.5mm offering and they only had $800 of property taxes. 

It's a 4 bed 1 bath and I'm open to either renting it or selling it (if I'm offered a price around the ARV).