Cold feet on first opportunity for foot in the door on Multi-family residential in a hot market. Looking for advice.
My investments are mostly commercial property, but I have been wanting to get into the Multi-family market for awhile now. I found an area I like near a University, and have been diligently watching the market for something to catches my eye. 

Almost everything worth buying is snapped up with cash offers out here. A lot of flippers buying up stuff, slapping paint on it and reselling. 

I found one that looked interesting from the pictures and put in offer at the price they wanted as soon as it hit the market. Offer was accepted. 

Currently occupied, 6% cap rate, lovely views from 2nd floor. 

Then on the inspection and found that it is ticking off a lot of things I didn't want. It's not an actual duplex, it was a single family converted into a duplex. Super old. Lot is only  4,000 square feet, and it's right next to a dry city gorge (I don't know what they care called, like a canal I guess but no water is in it currently).  

I kind of want to back out. I kind of want to re-negotiate price based on my findings. I kind of want to take it cause it is currently occupied and will in sense, "pay for itself" over time but won't make me any profit right now. 

Long term though.... it's zoned MF30, which caught my eye, and with the views... I don't know. The lot is so small though. 

It's a big gamble, but I've been sitting on the sidelines for awhile and missing out on opportunities. Feels like I'm feeling the FOMO, and this isn't really the place I have my heart on. I think my judgement is clouded by the fact that I CAN afford it and it wouldn't hurt me much if it was vacant because it is somewhere I would like to live. It's actually cheaper than the single family units. The people who bought it purchased it in 2018, fixed it up (had a roof leak and was abandoned) and are not selling it for 100k than what they bought it for. They did a good job too. 

I don't know just typing this all out is kind of helping. I just wish I had a mentor to go to for advice.
[{"id": "gokvpax", "text": "Sounds like you should buy it. Its probably worth asking if they will cover a few of the repairs but even if they don't Id still go for it.", "replies": [], "depth": 1}, {"id": "gokyqo6", "text": "Take the emotion out of it and listen to your instinct. With what you have learned, how much of a discount do you want to still like the deal? Ask for it, and explain why. It gives you an out so you can reset, learn from this, and go after the next one. Or, they accept/negotiate, and you get a better deal than if you said nothing. IMO it is only when you're willing to walk away that you get good deals.\n\nThe MF30 zoning doesn't mean much on a lot that size. Is it surrounded by junky buildings where someone would reasonably make an assemblage and do a large development?\n\nYou make your money going into a property and coming out of it, right? The cash flow on a 6 cap relative to your time investment is not great. I firmly believe you have to go in at a price you feel good about, or you will be disappointed in your investment.\n\n(The fact that they're flipping a 2018 purchase probably gives them less wiggle room and also might raise some flags for me)\n\nETA: this post is probably a better fit for r/realestateinvesting than here, see rule 4.", "replies": [], "depth": 1}, {"id": "golfkxt", "text": "If it that hot you should take your time investigate it.\n\nA shell home says R2 on relatively large lot of 9K. Got 1 structure 3/2 beams left in downtown in a bad neighborhood. I saw that dirty potty stick out of the gutted structure. Probate list for $800K. Flipper wants to offer full price in cash. The lowest offer starts low 1M and up. I think it had at least 2 figures offers since it has been on the market for 1 week. Within 50 miles in the midst of Covid every listing has someone eyeing wanting to offer more.\n\nI will go there today take a look.  I don't think he is going to make it.", "replies": [], "depth": 1}]