If my offer does get accepted, I will only be getting income from the one Unit 1 $700 for the first year, which will cause me to have a negative cash flow. 

I get it does not matter you have cash flow but you then have negative equity and no liquidity.  

My .02 cents is if you can buy a rental home and get on average $250-$300 in monthly cash flow after basic mortgage and property mgmt, then buy several quickly as if you only have one home and you have issues it wont seem so great but to have others to off-set the negative can be a great help.  

There's cash flow up here in Richmond, and a lot of the Bay Area's negative perception (what they heard) allows a less competitive market for RE investors (shh don't tell anyone I told you).

My personal properties range from empty lots and yearly rentals to high end weekly rentals, so I have a bit of experience all around with both positive and negative experiences.

Every credit pull is a negative ding on your credit score.

Also, I had always viewed the Sanford rentals as a negative for the surrounding SFR's but had never considered it from the opposite point of view, that the surrounding SFR's are a positive to Sanford rentals.

Believe it or not she has been able to command an illogical negative impact on productivity.  

I'm somewhat new in this game as well but I agree with Brian Garrett on this front, I'd love to buy some rentals in my back yard but cash flow can almost be negative if you go with .95/.5 rules to run some initial figures.

Did they have any kind of negative life event?