Your SFHome or apartment isn't zoned for business,, if they have anyone coming to residence for that purpose,, hair cutting, tattoos, tax work,massage parlor, drugs, or daycare,,,,,, its gonna be a issue..  

Foundation issuesTermitesFloodsInadequate insuranceInsurer fails to cover damagesWater leaks - old pipes breaking leaks and tenant caused leaksFalling treesDrug dealers moving next doorMeth cookersSquattersCopper thievesLooters stealing anything of value (furnace, appliances, etc)Multiple evictions back to backSlip & Fall scammersTenants bring in people not on leaseProperty Manager is inadequate or worse disappears/incapacitatedI've been in REI for 19yrs so not much I haven't seen, experienced or personally bite me in the assets. 

The industry of home repair battles with high incidence of drug use and abuse.  

Capital gains SE is not payable unless you're designated as a dealer.

There are pockets of homes that do not fit this mold, but overall, these communities North of town have been hit hard by meth and other drugs and the crime that comes along with them. 

You go to the local REIAs and the owners of these types of properties deal with drugs, gangs and property damage in these areas. 

You seem to have done good due diligence and the offence is non violent or drug related.

But, if you guys can afford to do the septic and any other improvements, you can probably make a profit just by doing that.If you can't afford to finance the improvements, you might look into wrapping the loan up with a construction loan.Sometimes, you can even get a FHA loan to do so.Another option would be to get a loan from a manufactured home dealer.  

Drugs, gambling, prostitution all pay in cash (I have had all the above submit applications).

On the other side of the coin, you have pharmaceuticals companies, who often have negative level of net debt (debt - cash) because if their next break through drug may not get approved and their sales will drop.