@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?

Recently it sold, price unknown.Rent-o-meter estimates $638 – $837 If I were to buy & hold this property I would make it section 8 ready.Tax assessor says it sold for $143 in 2002 then $192,750 in 2004 to the current owners.Record Deeds Info / aka Red Flags:'05 Well Fargo Mortgage 207k'05 Mortgage Discharge Mers Inc (3x)06 Lien Municipal (City) 2.6k due06 Wells Fargo Mortgage 228k till 11/203606 Wells Fargo 207k Released08 US Bank National Assignment'11 Intent to Foreclose (03/25/11 Auction Cancelled)'11 228k US Bank National Citigroup Mortgage Loan(Common sense is telling me they refi-ed about 30k a year after buying & I'm thinking in 3 years they couldn't have paid their mortgage down from 228 to 44k) but my real estate knowledge is limited.