It sounds like the lender is going to have to cut their losses on the existing owner and foreclose on them or do a short-sale type transaction where you purchase it, but at a value less than what the lender owes. 

That PVC piping is the drain from the sink which is obviously going to be replaced.

well this sounds interesting.

The details are as follows:Current Price: $370,000My offer: $320,000Condition: House is in rent ready condition but I have added $5000 for touch ups here and there2 Family House with each unit renting for about $1300Insurance/yr: $700Taxes: $11,500/yrLoan: FHA with 3.5% downpayment (30yrs)Here is a link to the analysis that I did as well in case that helps, this is analyzed with both units rented out to know whether the investment is sound, even though one will be my primary residence:https://www.biggerpockets.com/calculators/shared/2...Please let me know if I am missing something or if these other investors are offering too much.

Sounds like it's in pretty good shape, I would leave as is.

As cliche as it sounds' "patience is a virtue".

She said it was because she needed help which sounded reasonable so I didnt increase her rent as stated in the lease. 

I want to replace my income and go into REI full time in the next 3 years.

We started watching the webinars and signed up as a Pro Member in December and #BiggerPockets provided sound knowledge to go from zero to six properties in less than six months. 

You will definitely want to add an addendum to the new lease that confirms that it will be replacing the old lease.