That is not a particularly attractive investment.There are other factors to consider, but I'd have to be convinced to keep it.

I'm current on BP podcasts, and I particularly loved #75.

That doesn't mean depending on your particular goals (going for the property vs. wanting to get the lien redeemed and the interest) that getting an assignment from a municipality is necessarily "not good". 

This attachment to the appraisal will usually run an extra 100-150 dollars to the 475-500 dollar FHA appraisal but its worth it because that rental income will help you qualify for the property.In my local area the FHA allows use of 85% of gross rents minus PITIA full mtg payment (unlike fannie mae's 75% of gross rents) so its important to check your local HUD office to see what HUD's rental factor will be in your particular locality when trying to qualify for a FHA loan where gross rents are being used to qualify.If you're at 60k which is 5k a month the max DTI (debt to income) FHA will allow that I've obtained on an owner occupied property is 56.99% (all obligations mtg, credit cards, car, etc).

In particular look for ones that are professionally managed but performing poorly.  

In particular what comes to mind as it relates to investors is Greed and Obsession.

You would then wait about 7-8 months post FHA closing and refinance into conventional but in order to do so you would need a min of 20% equity or 80% LTV (loan to value) which is determined by your appraisal at that particular time in the future (7-8 months later).

I've already spoken to several friends who are mostly working sales and it's a bit disheartening to hear about the enormous amounts of competition out there in the realm of real estate investing, regardless of the particular niche.

On that note I'll mention that I'm particularly interested in connecting with folks in the Northern California and North Bay areas including Santa Rosa, Sonoma, Ukiah, Fort Bragg, Lake County, Eureka, Marin etc.

If it was an incredible deal and if the seller could assure the issues with the gas/heat on that one unit were ok I would have had the inspector inspect the rest of the property as is and that particular units gas line etc.