Clearly there is room for increased rents but is he really getting $40/unit?

usually tenants at those price points are used to using room units and won't pay extra to cover your HVAC expense in a Class C rental

There seems to be room for improvement on both sides.

This particular house was a 2bed, 1  bath, living, dining and office .

There's a lot of potential in this deal if I buy it right, because in addition to negotiating down the penalty for the code violations it is also way over assessed, and I can appeal to the tax board to dramatically reduce the taxes because it is outside of the statutory 15% wiggle room they're allowed on the assessment value. 

I included a link to the property below.http://www.realtor.com/realestateandhomes-detail/440-Grand-Ave_Hamilton_NJ_08610_M54932-70424?

We bought a HUD foreclosure what was in really good shape: 2,000 sf plus finished basement, 3/2.5 with a bonus room for $80,000.

I'm from Delta, Colorado and am interested in the western slope of Colorado, specifically Grand Junction, Delta, Montrose & surrounding areas.

#1- he doesn't want to compete with the guy who has signs out saying he paint a room for $75. 

I talked to her two days ago and she said they need fifty grand.