They may have signed a long term contract with the worlds most expensive lawn mowing service and the worlds worst property manager.

The worst case scenario would be for our insurance to take the hit and we'd be responsible for paying the $1000.

In theory it's not the worst idea I've ever heard, we shall see how it plays out.

This assumes that this lady will be in the rental for a LONG time, which I've known this lady for 8 years, and she's not going to be able to live on her own for another 5 years, I used a 7 to 10 year estimate as a worst case.

Seller seems very focused on their ask price and knows its practically new so I was running my numbers worst case if they don't budge.Regarding raising rents...

It's definitely not the worst place to invest (far from it), but it's not the best now either in my opinion.

So he is good in his service.Though being so far from the property, I am bit leaning towards going with professional company to manage any worst case scenario with tenant. 

The worst thing you can do is extend the loan for long periods of time (30 years).

I'd put as little down as possible and plan to renovate the worst unit (the one you live in).

He reminded me that worst case scenario is that I put the deed back in my name and make sure I have a good umbrella liability policy (I've been convinced that insurance can be sufficient in most cases, see e.g. this post by Matt Faircloth).