Newbie Question about Rehab costs

[Brandon Blue]

I have found a 3048 sqft property in low income area that is for sale for $40K or $13 per sqft. Best housing in the immediate area sells for 50-60 sqft. Very low income poor neighborhood. But this one is on a corner lot next to an elementary school with Industrial area nearby and 2 miles from popular downtown area.

The land is designated to allow multifamily units. The property is already cleaned out and is only foundation, framing, and some old plumbing and electrical. Roof and all exterior has been rehabbed by latest owner, but they got in over their heads on rehab. Property is framed to be able to make a triplex each around 1K sqft each. Rent could pull in $800-$900 for a 2/3 bed and 1 1/2 bath each unit. Rehab to get this property made into a triplex would cost about $120K. That would put $120 K in rehab and a 40K current price. Thats $160K investment, and property would likely be nicest in area, and if valued at $65 per sqft would be worth 200K. It would produce appx $2600 in income when fully rented. Cash flow seems great, but is that too much to invest in low income area? I would have to borrow at least half of it until rehab is complete and then refinance once value is up to qualify for 30 yr mortgage. Any advise would help?