On top of those challenges it had on site septic and well water.

Without seams, you don't have to worry about water or urine getting under it. 

I ran into that problem multiple times where I put in a bid a few thousand less than asking price that I KNEW they would accept, only to have an out of state investors blow my offer out of the water. 

Just clear the muddy water by doing a straight up 50/50 deal.

This will not cost you anything and you will obtain 95% of your water expenses every month from your tenants.

Currently the guest house is not separately metered for water or power.

If your numbers are accurate you should make almost 40k after paying your realtor :)Here are the numbers to back up my argument that this is not a good rental: Mortgage Rate 3.00% Length of Mortgage in years 30 Monthly Mortgage payment $420.55 Taxes $ 133.33 Sewer and Water $ 125.00 Trash $ - Heat/Utilities $ - HOA/Legal $ - Cap Ex and Ops $ 250.00 Insurance $ 100.00 Mgmt Fee $ 110.00 Vacancy $ 91.30 Total Expenses $1,230.18 Unit 1 $ 1,100.00 Unit 2 $ - Unit 3 $ - Unit 4 $ - Unit 5 $ - Unit 6 $ - Total Revenue $ 1,100.00 Cashflow/month $ (130.18) Cashflow/year $ (1,562.20) Cash on Cash Return -4.03%

I'd love to sell you something in my neck of the world but there's weird in the water and currently it's a bit of a bloodbath. 

I know a lot of people focus on Short Term Rentals over when you get closer to the water, but you need to be careful about what city you're in as STR are a very touchy subject.

Treated for bugs, replaced the interior and exterior "Zinsco" Breaker and service panels ($10,500), remodeled 2 bathrooms, replaced 3 of 5 water heaters, smoke detectors, added kitchen and bathroom GFCIs, 1 AC unit, 1 new dryer, replaced 2 windows, repaired several more windows.