There seems to be some water damage in one corner due to some water that was coming down from a gutter.

When utilities (maybe just water) gets turned on, city requires an inspection.

Theres water damage to the plywood.

So yes, back to the table & more prayers for guidance as to which house is meant for us next.

As a novice investor I don't bring anything to the table.

The quality of tenant is the variable, most people that need section 8 are good people who just haven't quite figured out how to improve their situation in life, they just want a place to live and will generally behave if they have a solid, clean, safe place to live.Make sure you check local laws and rules around section 8 so that you don't get yourself in hot water, perhaps get in touch with the existing owner/property manager and see what there experience has been with section 8 and especially the current tenants. 

The city is replacing the main water line at one of our single family rentals.

If so do you want them going down there a lot.For hidden costs expect to be hit by higher water bill fees and maintenance and vacancy. 

The community was presented as a stabilized and clean park but had under market local rental rates.The community is located within the City limits of Declo and has all city maintained water and sewer lines.

Unfortunately I left about $2000 in inspections/fees etc on the table, but they are negligible in the scope of things.