He needed a large down payment because he was paying for a home to be built.

I generally agree that you get what you pay for, so expensive pieces are often more likely the be true wood construction, and vintage is definitely the case.  

By net I mean take home pay after direct booking fees, including cleaning.

The seller is asking for $40,000 down which I am able to pay in cash.

It's essential to get all the information you can about the squatter: did they ever have a contract with the owner, how long have they been there, how many are there, has anyone told authorities, do they have access to any utilities you'll have to pay for, etc.

I believe the DLBA offers it to the next highest bidder.One other potential scenario is the winning buyer was willing to pay ~$100,000 for this house AND they are a city employee or has a relative that is a city employee.

This was more than I wanted to pay at the time. 

Why would she pay 12k for two furnaces and HW tanks, when the cost is about 6k- 7k, ?

-Has no crawlspace (common for older properties) so we couldn't see the foundation-Drywood termite/wood decaying fungi damage seen on all the windows/doors/parts of the beam on the exterior, parts of roof decking and rafters in the attic-Old leaks/moisture damage seen in the ceilings and attic-Parts of the roof has patch work-Roof doesn't have any permits on record (don't know how old it is)Seller's offer to me:-Fumigation treatment for drywood termites (tenting the house)-Replace and repair all damage wood throughout the house-Replace the entire roof with a new permit-Replace one window in every room (not all)-Pay for a structural engineer to inspect the foundation-Offer to get quotes for repairs and have a 15-20K budget to make all repairs, house is 500K.

Landlord pays for water and some common area lighting, $100 a month.