Duplex deal or no deal?

[Angela Schoenborn]

My husband and I are trying to begin real estate investing. We would eventually like to have several of our own properties to rent out. We recently went for the inspection on our potential property this past Monday. The 3 bedroom house went as expected with no huge concerns.The only one being that there are several vertical cracks in the foundation in the basement that could be an issue. However, the one bedroom apartment found to have significant termite damage (possibly 10 years worth) and is need of a new roof. The expected costs could be up to 20,000 in repairs. The whole exterior needs to be torn down and redone. The seller is willing to negotiate and I believe will be doing the repairs but we haven’t gotten confirmation yet on that. Should we even consider this as an option or should we back out now? The one bedroom apartment rents for $700 currently and can easily rent to $800. The house rents for $1300 and could go up to $1500 once cosmetic renovations are done. The garage portion of the one bedroom could eventually be converted into a studio and be rented for $500 or so. If this goes though we settled on 192000 with 3 percentage seller help. This was before the inspection or repairs. Just looking for an investors perspective and could use somebody advice.