If the seller has deferred maintenance, it was his choice, but the market is not going to reward him for it with a higher offer.  

At the end of the master's program you will definitely be in more, while if you start your own business, you might fail and end up in the same amount of debt, or you could succeed and actually make money.It's higher risk, but also higher reward. 

The reward can be there but if he can not perform 1, 2, and 3.   

and is there some way in your investment plan to reward an agent that will be giving you the help you need?

Several reasons:1. the bank does not want to reward the borrower by allowing him to get the property at a discount. ie the the bank bids 50k and the borrower bids 55k, then the borrower gets the property for less than the original balance owed.2. most loans have been sold so that they (the lender) have a contractual servicing agreement to bid the balance.3. many loans have pmi so that the lender gets paid in full. if they bid less, then pmi pays less.4. the many states have laws that require the lender to bid market, since market is hard to define in a foreclosure, they bid the balance to stay safe.5. left hand right hand. the legal team does not always get the asset management team on board until after the sale.6. many states have right to redeem the property, a lower bid means that they can redeem for less.7.you never know if someone will step up and pay.8. accounting rules for banks and potential losses are complicated but in general, a lower bid is usually not good for the bank where as a REO can be "fudged".9. accountability, banks are owned by shareholders, selling below market would be a breach of fiduciary duty to the shareholders.

It's a personal decision, but given the risks and potential rewards you've laid out, I personally wouldn't do it.  

So much so, that work was no longer rewarding for me.

Like @Manolo D. sad above, I can't imagine taking  on those size projects with the projection of such little reward.

Buying a rental property with reasonable good cap rate (obviously outside CA) seems like a good point to start with lower risk/reward and learn the ropes.

I have done a few projects on my own and this one would be a challenge, yet I believe the reward by far out weighs the risk.