Ask if there are any any additional fees for maintenance, advertising, evictions, etc... and make sure they are outlined in the agreement.

The subject property at list price is 52, based on market rent, and 57 based on contracted rent. 

You can add lease term that your tenantsthis is a non smoking rental and your tenants are fully responsiblefor all these violation fines and subject to eviction andcancellation of your lease with a 3 days notice (check with yourlocal city with how many days notice).

My first reaction was to by and hold with a subject to.

Memphis is not a small city by any stretch and the major job supplying industries are not subject to the up and down nature of a fluctuating economy.  

This is obviously insane, however after a lengthy email outlining my complaints they have agreed to waive the closing costs if we proceed.  

I can do 5 "Subject To's" in 5 months and make $100,000 without contractors, zoning, delays, carrying costs, banks , weather delays, decisions on paint colors, decisions on tile for the upstairs spare bathroom, etc, etc, etc.

Here is the language straight from the ISO form CG-00 10We will not pay on a replacement cost basis for any loss or damage: (1) Until the lost or damaged property is actually repaired or replaced; and (2) Unless the repairs or replacement are made as soon as reasonably possible after the loss or damage.We will not pay more for loss or dam- age on a replacement cost basis than the least of (1), (2) or (3), subject to f. below: (1) The Limit of Insurance applicable to the lost or damaged property; (2) The cost to replace the lost or damaged property with other property: (a) Of comparable material and quality; and (b) Used for the same purpose; or (3) The amount actually spent that is necessary to repair or replace the lost or damaged propertyIf the insurance company will not pay until construction is finished and will not pay more than the actual amount spent there is no conceivable way to make money from getting a lower bid when you have replacement cost coverage.

Can someone share thoughts on this subject? 

You are not approaching the right communities and perhaps not approaching them correctly.Read some of the older threads here on BP on these subjects.