What kind of condition is the property in?

Is it condition?

Its a 1971 building so am scared of the condition and repairs needed.

If you find out later that the actual condition is far different from what was described/depicted in the photos, then that's what inspection contingencies are for.

That is except for bringing the current vacant unit to rentable condition.

I doubt you will be able to get a loan with your conditions.

Is the building simply in such bad condition that no one would pay higher rents and are your proposed higher rents in line with the rents in the area similar to what you propose in other words are they that far below market for similar units?

@Shorab KhosraviYes, thats one option I was looking into about renewing the clauses with certain conditions.

Your first offer would be around 25K if it was in good condition. 

It doesn't matter whether it's foreclosed or not, just that the price/condition/location combo works for you.