I haven't done the math, but I wonder if you went with a 20 or 30 year instead of 15 to lower your payments and reduce your monthly negative cash flow?

The key it seems is to reduce vacancy.

The bulk of my investments are in the stock market, but I want to diversify and like the idea of buying buy and hold rentals.  

I am have been advising my clients to stay away from them.Family Dollar had gotten away from only one dollar items to sell and was mixing in high priced items which started reducing their profit margins.

The sellers (of estate) need to push this property fast and just reduced the price from $520,000 down to $405,000 and wont really budge as they have to pay a REVERSE mortgage off.

30 yearIf you want the cash flow and plan to add many more properties.15 yearIf you want to have the house paid off in 15 years to reduce leverage and have a higher cash flow. 

But it's understandable and you have to realize that if you buy a property with a bunch of problems, you either have to fix them all right away (which contributes to your capital outlay and reduces your "% rule" amount) or you fix them over a number of years and just consider it part of ongoing maintenance.Real estate is nice and flexible so different people can do things different ways. 

The seller is even willing to reduce the asking price because of this issue.

Some short selling banks actually reduce the commission paid in dual agency situations.  

I do think it helps reduce the amount of tire kicking tenants that apply.How does everyone run their background and credit checks?