Little fixer upper in C-/D+ neighborhood

[NA Loraine Nielsen]

Hello,

A friend has offered to sell his rental property, a 2 bed/1 bath on a double lot with attached 2-car garage for $40,000. It needs a new foundation so he's offered owner financing. I would definitely jump on this until l considered the neighborhood. Out of 5 neighborhoods in this town, 5 being the best, this one ranks about a 2. It isn't the absolute worst, but is right next to it. Most of the homes in the area are very old mobile homes. There are just a few small stick-built houses. Some properties are well kept and others have junker cars. Tenants in the area are possibly not ideal. Would someone want to buy it if we flipped it? I'm not sure. 

My initial decision was to simply pass on this, since we are in the midst of searching for a multifamily we can buy using an FHA loan, and don't want to complicate that process.

But then I started thinking about wholesaling, and wondered if there might be an opportunity for that. What do you think? Zillow says the value is $77,000. It's in Moses Lake, Washington. I would welcome any advice.