The major problems with this property are:- I don't know what normal CAP rates are for your environment, but it seems like the seller is asking for a premium for future expected rent increases. 

As I grow my business I want to offer rentals that give back to the environment. 

The industry was not regulated until the loan fraud became an issue requiring a license(s).

Also, depending on the HOA, there may or may not be regulations affecting when/how you can rent out the properties.

"You just need to pick a market where there is not any current regulations and hopefully none on the horizon."

Unfortunately, I only cared about throwing parties, playing baseball, and studying for exams so I missed out on studying the economics of a downturn.For those who were real estate investors during the last recession and others, what is the lending environment like?

I'm not sure if that was because families were applying or a regulation like he said.

A huge college to support the rental environment as well as a growing economy from jobs flowing in.

These are heavily regulated and not allowed to be profit centers for the lender.  

As noted above, if the numbers pan out then you can make it work; but I want to echo what Anthony has said in regards to major problematic structural issues - additionally, the environment can play into this as well; what kind of land is the house located on?