I would offer the 5 unit seller a lower price than he really would like, but I would buy it "As Is" with no contingencies.

Maybe you can get for a lower price?

This new one comes with a lower premium and deductible, but I'm still dealing with being assigned to technicians who don't show up on time, if at all, and having to explain my issues to representatives who don't seem to know that much about home issues. 

Do you find it difficult managing multiple people under one roof in the lower income classes?

It seems it could work for lower priced properties as an alternative to hard money .

If it's a junior lien holder, still, they aren't going to bid anything after their total debt but other bidders might get into a frenzy thinking they are getting a screaming deal (If they didn't do their homework about other liens).Even where its a run of the mill senior lien holder foreclosure, they still won't bid over total debt but, they might set the opening bid lower than total debt if their analysis shows the property to be worth less than total debt.

Just in case the new appraisal comes in lower than expected. 

The smaller/lower asking price the property, the less leeway I have been seeing sellers give on purchase price.

Then they got rid of the contractors (they didn't have to pay the unemployment taxes to the state when they got rid of us), and finally, they had to cut into their own muscle when things got really bad.

You rent out the upper and lower units and the total creates positive cashflow that may not be available in a regular single family unit.