I would definately do a title search. 

In many states this is defined as 24 hours notice. 

Define your goals, search for opportunity, do your due diligence, crunch a financial analysis, then close the deal.

Based on your description of the water bill , I would not define these tenants as "great".

The next step I would say is to define what kind of Investor you want to be then start networking. 

I have heard that CapEx items are defined as 'depreciatable' by the IRS.  

NOI is not defined as 50% of Gross rents. 

Maybe defining your criteria in what your expect from your management maintenance and such will help in making your decision.

Another option is indeed to do it as a personal loan, but even with a solid borrower I would always insist on a contract clearly defining terms and, ideally it would be collateralized by a lien on the property.Richard I don't think I would categorize this as a rescue loan.  

Anyone have a word or excel document or set of rules that would help define what one should be looking for when they are evaluating a potential properties condition or structure before they make an offer and pay for an inspection?