We are all emotional creatures.

So many people are crazy and emotional. 

I know an offer with contingencies is an option, but I am trying to see if it's even worth getting deeper into negotiations if the inspection and appraisal results don't make sense.

Before I was a licensed agent, I worked for a local non-profit which gave me a deeper understanding than most agents have of all the neighborhoods in Cincinnati.

If they weren't family and friends, you would not be able to get this loan.This isn't meant to dissuade you at all, but you may want to look into other ways to start, or find someone with deeper pockets to partner with you or mentor you.Good luck!

Again, there aren't many solidly actionable plans, but this goes considerably deeper into the obstacles, strategies, and rewards you will experience as an investor.The Book on Rental Property Investing (by Brandon Turner)This is a great one right from the BiggerPockets community!

I have been trying to run the numbers and do research and trying not to let emotions take over. 

Some trees have a much deeper reach on their root system, while others are pretty shallow, but spread out laterally.

One thing to remember about the auctions is that it's easy to get emotionally involved. 

JoshuaI'm reading a lot things into your post, 100 year old house you love and have emotional/sentimental attachment to it, vacant lot next door, $160+/- primary home mortgage, and desire to get into real estate development and/or buy and hold.