I assume that their reserve is depleted right now and there are many delayed repairs that needs to be addressed now and in the near future. For instance, copper plumbing alone will cost about $5K/unit.

I totally agree with you that foreclosures in these type situations are a blessing in disguise to let people with financial means to fix it up. However, I do not see how investor will profit from this at the current market value of $70K and $90K.