I am new to this but an idea that came to me is offering asking price contingent on inspection (but knowing that something major will be there as the homes are very distressed) which gives me an out / the ability to renegotiate. 

*Offer 2: $180,000 contingent upon conventional financing, no inspection contingency, must close before the end of the year.

Due diligence periods are for buyers to inspect.

When we lived in Michigan the city we lived in had strict inspections that had to be conducted for a fee to redo burned homes.Realize that while you can encapsulate some of the burned wood to eliminate the smell, the heat does change the structure of the wood and may dictate replacement - again factor that into your offer. 

Things like common issues with the older housing stock in the area, what inspections are absolutely necessary, and experience renting in the area would all be greatly appreciated!

Had been sitting on the MLS for a few months so we offered low and negotiated further after inspections.

Had been sitting on the MLS for a few months so we offered low and negotiated further after inspections.

…Hands On inspection of each POH (Be sure to identify SCRAP homes and assign a negative value)Professional inspection of on-site electrical systems (document any deficiencies); Are box amperages up to code?

They finally came back with the following:“At this point we would just need you to apply for a “Special Inspection” at our office for visual “certification” of the existing structures.”I am curious what this sort of “visual certification” entails.

If you have a good home inspection they should be able to look out for you.