Sounds like a great first project!  

Sounds like you have a lot of options and a good amount of capital to get started.

That sounds like your renting it back to them? 

In this case, where you don't sound like you're doing a full rehab and you'll have a full mortgage, I would probably do 20k or more. 

Sounds like extortion to me....

Sounds like a thin deal in this area especially with seller financing.

@Neal Collins Sound advice there, That scenario is a good one to choose but I sense some urgency in closing the deal is of value here so I chose to inherit the tenants to close the deal quicker, it appears that helped me get the discounted price.

I thought this may be worthwhile because a realtor I talked to sounded very agitated/annoyed by all the low ball offers he sees from "wannabee investors" giving lowball offers...

. , it sounds like you’ve done most of the research on your neighbors property and it’s still a good buy at the right price.

I'm a newbie but if you have equity and the deal makes sense that you could get into a rental and potentially pay down your HELOC , that sounds like a win.