Hi Stephen,I ran the numbers you presented.

Simply point out the problems and present the sellers with the estimate to repair.

Minimal HOA.Assuming that rent, 20% down payment, 50% vacancy rate, the cash flow would not be super, but one of the main reasons for my interest in real estate in the immediate present is the effect in reducing our taxable income, rather than for providing replacement income.

I also work 9-5 so I sent a contractor in (without me present (I know, mistake, but he sent me pics) who said there was 6 wet/corroded breakers due to water entering the box.

He presented podiatrist's bill of $6,000 and $4,000 for pain and suffering.

You're just setting yourself up for failure.Regardless of what happens, you need to get rid of this tenant when the opportunity presents itself.

Payments that you make normally fall into one of 3 buckets100% of the payment can be factored in somewhere on the returnPartial payment can be factored somewhere on the return0% of the payment can be factored in somewhere on the returnHouse-hacking also has considerable tax implications in the event that you want to sell this property.You can potentially defer a portion or all of the gain on the investment property with 1031 exclusion.You can potentially exclude a portion or all of the gain on the personal residence with section 121 exclusion

Presentation and rapport can help (since you are dealing directly with a person) hit the ARV you are shooting for

Then she’s presented with a bill. 

Ie properties in foreclosure, or properties with obvious deferred maintenance.