It still sounds very attractive and amazing for me if I can invest a property with 10% or above NOI, but for sure subject to limited legal risk and potential crazy tenant.

The risk/reward would seem to mitigate in favor of at least an attorney consult. 

Some brokers are simply too risk averse to allow their agents to serve investors like they need, with creative terms and such.

My partner and I grew our portfolio to 5 properties within a few short years, but he never felt that the benefits of real estate investing outweighed the risks... despite the profits we made while downsizing. 

I have found that the Waianae coast offers some good values still, but most people shy away from that area, which in my opinion creates potential opportunity, but also risk.

How strong are the parents, what is their ability to purchase the next house, what liquid capital do they have available, how much risk are they willing to accept?

High risk for what...

They might require additional premium in order to insure over these issues (which the seller should pay, imo) or they may say "No" and either you would need to agree to accept the risk or the seller would need to fix the problems... because they essentially built over someone else's property -- 3 times!

It does seem like a risk I wouldn't want to take.I'm sure you will, but be careful to use insured and licensed remediators for lead and asbestos, if for no other reason than liability. 

Then you have no risk and need no money.