The management company apparently consulted with an attorney and came back that the solution was to get the repairs initiated as soon as possible by issuing a special assessment.

He's firm at $15K and I checked county assessor, the parcel was assessed at $62.5k as of 5/12/13.We've agreed to $15K being the price, and I have the contract from BP on my computer.

The 2% and 50% rules are only for assessing the potential of a profitable deal, before a deal is made, it has no bearing on determining actual cash flow or actual performance of an operation after you buy a property, apples and oranges.Those ratios are to assess a potential deal, not to measue any past economic performance.

Any money you are making could be wiped away if this is the type of HOA that using bonds or special assessments to redo everything and anything. 

Since the law doesn't specify exactly how to maintain the standard (but does say you must) I recommend a Post Compliance Assessment Determination (PCAD) every 5 years or so to CYA.

Just type the address in and click on the Assessment Info.

In my personal opinion, the duplex rather overpriced for the rent that its generating.Additionally, with your CoC% it is no better than the stock market (3%-6%).I usually look for deals that will get a 10% CoC at a minimum.Lastly, be mindful of the 50% Rule it will help quickly assess properties as you shop for deals. 

If these are separate deeds then they will be assessed on each deed, not as one property.

We are already starting to see this at the property tax level where assessors are being very aggressive in raising assessments. 

In another example, one city defines slum property as having structurally unsound exterior surfaces, roof, walls, doors, floors, stairwells, porches or railings; lack of potable water, adequate sanitation facilities, adequate water or waste pipe connections; hazardous electrical systems or gas connections; lack of safe rapid egress; or accumulation of human or animal waste, medical or biological waste, gaseous or combustible materials, dangerous or corrosive liquids, flammable or explosive materials or drug paraphernalia.The authority to designate a slum property rests with the city's building inspector.Slum property is subject to immediate inspection and to annual inspections for three years, with the inspection costs assessed to the property's owner.