How to price this property

[Brent Lamb]

I've owned rental properties in the past, but this is an interesting one. I'm looking to see if anyone can give me some info on how to go about pricing an offer on this off market property. The owner is uncertain what it's worth and isn't giving me any numbers to start from. I would be buying this property as an inexpensive rental, after some work.

Maybe I should be pricing this property by looking at what buildable lots are worth in the area. 

Some property info:
It has not been lived in for many years. 
It's in a small town of about 3,500 people and is close to Stockton, CA
Built in 1936
It's been added onto twice. Enlarging the living room and adding the bathroom. 
764 square foot house
6,970 square foot lot
Online is shows as 2 bedrooms and 1 bathroom. It's only 1 bedroom with a living room
There is no garage or driveway. 
The house is sitting on the ground and does not have a foundation. With this being the case there is a decent about of settling and most of the floors have a pretty good slope to them. 
The kitchen looks original and is in need of a remodel in order to make it useable. 
The siding is shiplap and the paint is all peeling off.
Heater is gas and sitting (free standing) in the living room. There is one AC unit in a window in the living room. 
The neighbors just built a fence around their property and appears to encroach on this properties property line. I will have an assessor come out and mark the property lines.
The water heater is next to the house in it's own little wood building ( Just big enough to hold it.)

The owner said he feels the house wouldn't be worth lifting and adding a foundation. He thinks at that point it's a tear down. Just so you get an idea of his view on the property. 

I would love some direction on how to estimate the value of this property.  Please let me know if I've left out some info that will be helpful.
I will attach some photos of the house. 

Brent