@Casey Gray if you can get a conventional loan despite the property's condition then the only advantage you have is that it will cost you much less, but that's at a price of it taking a long time to close, being a pain in the derriere, and possibly costing you the deal because cash is king.  

Is the messiness of the communication indicative of bigger problems and setting myself up for a world of pain with the tenants, or am I overthinking that and its really just a problem of elderly owners with their son trying to help sell a property in an area he doesn't specialize in?

Ugly things happen when money disappear and you start talking in negative numbers.Good luck.

Ok, all kidding aside, this sounds like it could easily just be a misunderstanding of the loan terms, or it could be that the loan is totally legit and you will see 100% of the money, but the lender just thinks they can get one over on you and make a few extra bucks on fees, and then it could also be a total 'take your money and disappear' scam.

I hear you, mailing campaigns are a pain in the ***.

It was painful but absolutely worth it.

Fix what comes up on the inspection or anything that is dated like old toilet valves that are going to be a pain once a tenant moves in.

Aside from how painful it was to get our real estate agent to prepare a satisfactory lease that protected us (she said it was compicated), she told us that according to the listing agent the sellers felt the rent was too high because it was more that their current mortgage.

Assuming your drug dealers are paying their rent I would have given Jim the $250 and told him to disappear.

Lack of maintenance was a bit of a pain toward the end, but it was also great to have dirt-cheap rent and lots of freedom (wanna paint the walls red?