The walls and doors are covered in holes, the place smells awful (like dog pee and old, nasty carpet, in fact, if we walk barefoot, our feet are filthy within a couple minutes), there are no screens on some of the windows and the sliding back door (which, btw, does not have a handle because the previous tenant broke it completely off), and I told him mosquitoes are attracted to me and that I have a severe allergy to them (there is no AC, so we have to have the windows and doors open at night to cool the place down, but can't without screens), he also said he would have a microwave installed above the stove when we looked at the place that first night months ago and did not do it.I fully understand all of what he said was a load of BS but that nothing was in writing, so we can't hold him to any of that stuff *but* we also haven’t signed a rental agreement or given him any money yet--no deposit, no first month's rent, nothing--and we moved in on July 1st. 

At this point the city will be inspecting an empty hole in the ground.

Inspectors aren't going to provide you with a monetary value for repairs. if the house is severally distressed, you can't rely on their assessment of the property either, as there will be items which aren't on the surface and that they can't test.

The alley was susceptible to rutting because the gas company has to dig a couple huge holes in the middle of it to expose the gas lines.

Holes in the yard, shredded walls & woodwork, destroyed screens; I'd sure advise an ongoing inspection routine to keep on top of things.

Once you do that, you can calculate your monetary cost & benefit from using the property.

They feed on pulling sellers out of a sink hole, rather than take yearly losses, they would just buy the property off the bat and turn it around.

If you have a hard time affording the extra $7500 for the down payment, you may have an even harder time with 6 months of vacancy and an oppositional tenant, if things happen to work out like that.Other than that, I agree with @Ben Wilkins that you shouldn't count on any pet rent income or coin op income in your #s, and with @Josh Caldwell that a significant part of this decision should be whether you actually want to live in this property (for the 5 years of the loan assistance term).I don't think the #s are going to be cash flow positive for a while, but if you look at it as "monetary assistance for a place I want to live anyway, along with an introduction to landlording" then the whole package may still be good for you in this case.

Blizzard outside.Drive to the home.Access the damages.Look at the big hole in the roof from the fire dept.Plan our strategy.Talk to tenants.

MONETARY DISTRIBUTIONSI plan on distributing either monthly or quarterly payments to the PML and me, after CapEx, taxes, payments, etc.