Seller likely knows the condition of the property.

Ideally you should be able to determine your target rent by knowing the rental market, looking at the condition of the units and estimating expenses.

Obviously, it all depends on upgrades, condition of multi unit, exactly what part of the city the property is located.

So one other thing I would recommend is just put the property under contract with a longer than average due diligence say 3 or 6 months and add condition that closing is dependent on your zoning application.

Also another poster said to diy, your supposed to have a epa certification to work with refrigeratant and air conditioning installation equipment is expensive to.As to why a HVAC contractor is expensive is because they have a business to run, employees, workers compensation insurance, general liability insurance, shop expenses, trucks etc.

All located in the basement in excellent condition (probably the best part of the whole property).

FHA has certain requirements to the condition of the property.You have to make the decision, but here are some things to think about to help you through this.Know that we are at ATH's in LA.

What I'm really trying to figure out is whether I'll be able to buy this property after it's entered into the collection/auction process with this third party lawyer. 

@Harvey Levin I heard that too from a lawyer.

Who knows, but in the end, unless it's directly going to affect money in your pocket or the potential condition of your home, I would give them some grace for the 1st week as they get settled (nested) into their new home.