Dealed failed on inspection issues

Sunday we had an inspection done. The inspector flagged a lot of items and we took over 3 pages worth of notes. Most weren't deal breakers. There were dead roaches (my pest control guy said he could deal with that), broken windows (again not something I was worried about), soft wood under toilets etc etc etc.

The one thing we were uncomfortable with was the small split in a heating pipe we found behind a drop ceiling. Due to finding one we expected more so today I had my heating and plumbing contractor go over to the house with me. We removed covers from baseboard heating and found more splits, we carefully examined the pipes in the basement and found even more along with bulges which all indicated that the pipes have frozen. We also pulled the cover off the furnace and my contractor thinks the holding tanks in the furnaces are cracked. What we didn't find which didn't make any sense is signs of water damage. The drop ceiling had minor stains, None of the walls showed any signs that I would expect if the pipes froze and the thawed spraying water all over the place. It is odd, the property only came on the market in April of this year and it hasn't really been cold enough since. The pipes must have froze prior to the bank taking over it. They went ahead and winterized it but it was already to late.

I could deal with bugs, bad carpets, kitchen cabinets which looked like they had seen better days and a yardful of trash, but to replace the heating system for both units and re-pipe the house is way more than I want to spend. My plumber figures 25K - 30K to make all the needed repairs.
So I canceled the deal. My broker said the bank might come back and try to get me to buy it by lowering the price and adding funds to cover the repair. If they do I might consider it, but we have moved from "cleanup and light renovation" to "major rehab" and I didn't want to that as my first deal.

I am going to look at 2 new buildings which just came on the market. I already have financing in place and my mortgage broker said the credit reports they pulled are good for 90 days. I already raised my cash for my down payment so I have money in hand also. Just a matter of finding the next property.

All total I spent $360 on inspections but it was money well spent, as I was refunded my $500 earnest money and I learned a valuable lesson. I did look at the pipes prior to putting in the offer, but I didn't check in every room and I didn't carefully trace the pipes back from the heating system. The next one I am going to be like Sherlock Holmes and get my big magnifying glass out to carefully inspect the pipes prior to making an offer.