Owner was shocked but didn’t have a leg to stand on after dropping the ball herself.

Could the housing market drop like it did in 2008 and I loose that 30%, yes. 

I blame the constituents.Just in the news several Moms who were homeless broke into a vacant home.

The bank countered by dropping the price by the difference of the credit.

The good news is that, if you find out before you purchase that the work wasn't up-to-code or wasn't recorded, you could opt to use this information as leverage to talk the seller down on price.The other thing I thought of when reading your post was that an appraiser may want to see the new rent values stabilized before factoring them into the appraisal. 

Just a thought, and possible strategy if dropping 10% on a down payment is difficult for someone.

The good news is that there are a lot of REIAs in SE Michigan. 

You can always refinance a fixed if rates drop a lot.On another note did you get a good deal on the purchase or are you counting on appreciation? 

No rain, but it drops the temp to 92F so back to work. 

In the meantime I heard from my other tenants that this chick was bad news, talked to the local police who told me she was a "known entity" so I started showing the unit to get new tenants in once the lease was up.