Passed on a property - Did we do the right thing?

[Chris Palmer]

We had put in a cash offer on a house in Gainesville, TX. The listing price was $99k, we offered $95k. The bright side of the property was there was two potential rental income sources. There was a main house built in 1920 which was a 2 bd 1 bath 1400 sq ft home. Comps in the area were very favorable, but the house was in very poor condition. Thanks to some good advice we got of the forum we estimated that improvement costs would have been around $50k on the main house and around $21k on the smaller cottage. Rental comps were in the neighborhood of $700 and $400 for a total of $1100 / month. When we ran the spreadsheet numbers we weren’t getting but 3% return on the cash put into the house.
That of course was if it stayed rented.

My question was did we make the right call? What would have been a price point in the property which would make sense? Is there a calculator for that?