Wanted to throw this out to see what red flags if any you see that maybe we haven't considered!  

@Kobus De Villiers , before you invest in multi-family, listen to my podcast where I committed the worst investment mistake of my career buying a 36-unit apartment in a war zone - here: http://Biggerpockets.com/show65

Just make sure the property is not in a location that is needed for things like flood control and such where condemnation for eminent domain is possible (EX: flood zone projects) 

It is zoned as a duplex with (2) 2 bdrm 1 bath units, along with a 1500 sq ft workshop attached that is currently rented by the previous owners.

Sometimes the financials on the more expensive ones wont break even and are in the Red!.

I'm trying to be ethical and honest but at the same time don't want to throw any red flags up with the seller in explaining my reasoning.

No not in a war zone but in upscale suburbs.

You will need to go to the Zoning Department to see if a 4-Family is even allowed on the lot.

Find at least one company that uses the software and ask them if you can call for advise if you are having trouble (preferably in your same time zone) A lot of the PM software companies have a 24 hr wait on support, so you either have to go to their support page and read to find your answers, or find a buddy you can call.

@Robert Loiselle  On the first property close to college and transportation, what is the zoning?