THere are also some issues with some aspects of the outside - the detached-garage roof is rotting and needs replacing, the outside back porch overhang roof is also rotting and needs replacement (has signs of mold / mildew on underside, shingles are missing) Now, this is an REO and the broker states Conventional Financing is an option so I plan to put 20% down as I'm preapproved.  

Moving air always helps basements dry out more.

Both property types can cashflow big time and both can suck your savings dry.  

I am looking for a moderate rehab for a property (windows, flooring, dry wall) and potentially adding a bathroom etc.

There is another post on here where a guy loaned money to his friend, then the deal fell through and it turns out his friend took his $24k and paid some back taxes with it, so the trust is gone, the money is probably gone, and he is left high and dry. 

We did see some standing water toward the back part of the backyard when we looked at this house, but we were hoping it was still just drying up since we had such a snowy winter.

The duplex I'm considering is right near downtown and some small businesses (dry cleaners, restaurant, gas station, grocery store, etc.).QUESTIONS:1.)

Knob and tube wiring or worse, amateur hybrid wiring, galvanized supply lines, non functioning windows, pealing lead paint and rotted exteriors.

Jobs dried up and people were out of work.  

We'll I do believe the city is shrinking.Most of the empty foreclosures, sit and rot until they are condemned and torn down.