I am assuming the buyer found the encroachment agreement via his title company or the seller revealed it to them.

There will be insurance $13/mo and POS from city $17/mo.Let's say $500/mo make it $6K/year.

If you don't keep insurance on the property if its mortgaged, the bank will get insurance for you and you won't have a choice in the matter.

Lots of people fear the increased insurance premiums, expense and hassle.As to the costs, just talk with a local pool company.  

Private Mortgage Insurance is simply an insurance company insuring a portion of the mortgage.

I actually bought a 4 unit a mile away for $45,000 last year but that needed about 30K worth of work so I feel this is about right as this one is turn key with no repairs needed.The seller financing deal - Sales price $63,500Cash at close from me $50004 year note @ 4% for remainder ($58,500), monthly payment of $1000 with balloon at the end, no prepayment penalties.Monthly projectionsIncome =     $2200Expense=    $220 management                     $220 CAPEX = No problems yet but "Unknown age" on the roof and owner has had property for 20 years                     $480 Insurance/taxes = Total taxes for 2017 were $4982 on assessed value of $78000 plus $600 a year for insurance

The current lender is an insurance company, and I'm not sure how hard they are to deal with. 

You'll need to get title insurance.

Most of the good cash-flowing properties that we are seeing For 15-30k down that will cash flow on average $150-350 /mo after "The Big 6" (mortgage, taxes, insurance, vacancy, management, maintenance) have been paid.

That could have insurance and other liability implications as well.