He used a few layers of wood to replace the floor - he showed me the old wood and it was bad - rotten. 

Do you have a calculation you use to come up with an answer of is this a good or bad deal? 

If so - have you had good/bad experience with it?

Timing may be bad to quit your job.What you may want to consider doing is buying something in the midwest that does cashflow, and then spending the money when you buy it to fix it up, get max rents, etc.

They must like the collateral in case it goes bad...they would just go back to the position they were in before.

We had one place that seemed like it was permeated with a bad smell and snaking the main cured the problem. 

this is where it gets bad.   

It's not a bad idea at all.

You might run into an issue if the damage is so bad that it effects the intergrity of the building.

When questioned she claimed her “boyfriend” wrote a bunch of bad checks he stole.