sounds like a good deal to me, what am i missing?

[Blair Boan]

I live in Greenville, SC and work as a real estate agent. I live in a neighborhood that has boomed in the last 5 years. There is a 2 bed 1 bath home on my street that should be listed at minimum $215k. Its being sold FSBO at $196k "as is"

The only way I could make this purchase is if I pulled the downpayment of 20% from my HELOC. My home was purchased in 2007 for $128k. I owe $55k on it. It was recently appraised for $315k two years ago and today its market value is somewhere around $350k-$385k. (just trying to give as much background as possible)

Rent for a 2 bed 1 bath in this area is about $1300/month. I have used up all my free calculator uses on here and cant spitball any numbers to you but, I know the cash on cash return is at 3% or something like that and the ROI isnt all that great, but where I see a counter for that is the neighborhood and the fact that our property management division at the firm I work for has a waiting list literally, to get into this neighborhood. And also, this home is surrounded by 3200-4000 square foot homes. This house could be added onto one day and brought up to par with everything else. The lot beside it, just the land, sold for $112k. The buyers built a 3800 sqft home on it.

The unknown factors are what all needs to be done to the house.  The photos (take them for what its worth) show a typical home built in the 50s around here in good shape.  I would have to go through an inspection to see what the major factors are, but to shed some light on my personal situation, this would be a out of the box purchase being my first deal and I would need to rely on renters to cover my mortgage until I could put enough in the bank to build up a little safety net just in case of some major capital expense or if for some reason there is a long vacancy period.  And it goes without saying, that everyone in my family thinks I crazy but we all know its the ones that love us the most that usually hold us back.  

Thanks for taking the time to help out in anyway possible.  Im sure I have left some things out so please dont hesitate to inquire about anything.

To wrap up, I suppose I have many questions about the whole process but just give me whatever feedback you can, would love to see how others would go about this.  I know this would not be a "money maker" per se, but my main objective would be to simply acquire a discounted home in this hot market, and let someone else "buy" it for me.  Possibly down the road I could add on to it and increase its retail value, or continue to rent it out and pay the mortgage down.   

many thanks!