We would greatly appreciate any input from the community regarding current market conditions, potential for income, and ultimately, whether this sounds like a good deal or a bad deal.  

I recently started negotiations to bring the offer to $695K due to the condition.

Maybe this one is in slightly better condition but can't be too sure.

It's probably worthwhile if the furniture they supplied is not in good condition.

For example look at what is happening to states with the current COVID conditions. 

Most sellers I talk to that might sell me their home at a lower than retail price, are also contemplating refinance to just pull out the inflated cash equity they now have due to the local market conditions.

If yes, bear in mind that Mexican developers rarely give post-construction financing at all, let alone at such advantageous conditions. 

The home was built in 1938 and is in good condition and in a great up and coming neighborhood.

Fannie Mae states the following:Fannie Mae’s April 3 clarification of the “Second-Home Rider” shows that homeowners are allowed to rent out a second home after one year of ownership and that short-term renting during the first year is also permitted under specific conditions The following eligibility requirements apply to second home Mortgages:·The Mortgage must be secured by a 1-unit property·The Borrower must occupy the second home for some portion of the year·The Borrower must keep the property available primarily (i.e., more than half of the calendar year) for the Borrower's personal use and enjoyment·The Borrower may rent the property on a short-term basis provided that the property is not subject to any rental pools or agreements that require the Borrower to rent the property, give a management company or entity control over the occupancy of the property, or involve revenue sharing between any owners and the developer or another party·The Mortgaged Premises must be in such a location to function reasonably as a second home·The second home must be suitable for year-round occupancy with the following exception: a second home with seasonal limitations on year-round occupancy (e.g., lack of winter accessibility) is eligible provided the appraiser includes at least one comparable sale with similar seasonal limitations to demonstrate the marketability of the subject property.

There are REOs that are in better condition than owner-occupied sales.