Day: fairly lively since its weekend, kids are playing outside, saw a few grown men shirtless, walking around.

When she got the keys she said she was unhappy with the place and we did a walk through next morning.

Walk before you run.

I have run through the numbers and i will be cashflowing on the property for the purchase prices we have agreed to ($81,500 at about $900 per month in rent).I have walked through the complex and spoken to neighbors who all seemed happy with the townhouse community (one even said it was his favorite place).  

The reason behind this is because the house needs fixed up---new carpet, water heater,all new flooring throughout and the bathroom needs renovation as well. the gutters are falling off and the fascia boards are rotting...with that said I can buy it for what he owes the bank with 2k additional for him to walk away happy.

So thank you @Brandon Turner @Ben Leybovich @Michael Blank and others for your great insight.I did what I was told and established a relationship with a commercial broker who in turn sent me an off market listing that I believe is a great value add property.This is a 8 unit MFR in an "A CLASS" neighborhood located in Bklyn NY within 2-10min walking distance to any and all amenities, (Barclay's Center, Malls, Shopping center, Banks, Restaurants, Museum, Parks etc.)All 8 units are 4 rooms (2bedrooms) including 1 duplex apt.....  5 units are rent stabilized and 3 units are free market including Duplex, all of which are receiving way less than market rents.Typical Market rents for 2 bedrooms in this area are 3k+/mth, also the typical vacancy rates for this area are @ 2%-3.5% (Bklyn market analysis). 

Walking into the meetup venue, I was expecting a VIP club of sorts complete with arrogant rich people who wanted to brag about how many Bentleys they had in the garage. 

Im looking for "Win Win" deals so the seller can walk away happy.

I like to leave room for tenants to negotiate so they can walk away feeling like they got a good deal.

You'll need to do the same in order to be competitive for deals like these.If I am you, I am teaming up with an experienced contractor who will walk the property with you and let you know what it needs in order to make it marketable or build value as you stated.