CRAZY CASH FLOW but negative equity?

[Jonathan Safa]

Bigger Pockets!! Currently under contract on a home at $50,000 (shoutout to all my Tulsa, Oklahoma people). After the inspector went through yesterday, we found significant structural damage among other things. House being sold "as is." Current rental income is $1125. But I wouldn't put a dollar into the home, buying as is, in two years I do not think I could sell it for anything more than $40,000. To be honest, the current state of living is not ideal and The structure, along with some electrical issues, may be be lawsuit-inducing. HOWEVER, There is a current appraisal at $86,000. I could take this appraisal to the bank, do a cash out refinance, pull out all of my cash out of the home, while having roughly $800 in positive cash flow every month. I have still about 24 hours to pull out of contract. Thoughts?