Newbie in east bay, CA

[Erika Johnson]

I'm new to this site and grateful for all of the information on this site. I've been wanting to get into real estate and it seems within my reach now; albeit in the less desirable areas and using FHA. I have been searching for SFH and MFH. I found a SFH that seems like a good deal, but I'm not sure.

The house is in a neighborhood that has historically been plagued with violence, but is slowly turning around and is more desirable than surrounding areas. Inspections indicate about $5000 of repairs needed. My plan is to buy and hold, while doing cosmetic renovations over time and eventually refinancing and renting. 

However, my concern is that the home may be overpriced. It's one of the bigger homes, but some of the similarly sized homes are $50,000 less on average. And according to Zillow, the estimate for the home is about $75,000 below the current asking price. There is a smaller home (~600 sqft) that sold at the same price only a few weeks ago, but it's flipped and has an unfinished garage that could be converted into a 3br rental. My research indicates that I if rent the home right now I'll have a $500 gap if I pay the asking price. But since I'm not planning to rent right now and want to hold the property as the neighborhood improves, is it still a bad buy?