My second rental is on crack(ed) walls!

[Linda Duse]

Hello Bigger Pockets.  I'm looking at a second rental and I want to live in the property for a year to qualify for homestead exemption.  But first a little about me.  I'm a new investor and purchased my first rental in August of 2016.  It is a 3 bedroom one bath located in Altoona, PA. A property manager manages the rental because I live in Virginia.  That property is doing well.

On to my second rental in waiting.  It is also located in Altoona, PA, a 3 bedroom 1.5 bath home.  It was originally on the market for $84,900 and now priced to sell for $69,900.  As mentioned above my plan is to live in the property to qualify for homestead.  I have viewed the property and it needs updating.  There are substantial cracks located on the first floor walls but the property was built in 1922.  Overall the location of  the property is in a very good area.   The homes in that area are selling for 85k-90k.

The owner of the property has been placed in a nursing facility and the seller has POA. The property has been on the market for 191 days. I've made a bid for $55k contingent upon an inspection. The seller made a counter bid of $62k. The rent for that area is between $675-$700. With 20% down and a 30yr mortgage the payment is approx. $360 and with a 15yr the monthly payment is approx. $473. The repair cost for new carpet, paint and removal of half a wall to open up the living room would be approximately 3k-5k. That's only if the cracks aren't anything major.

Finally my question.  Should I move forward with this deal and live in the property for a year to receive homestead exemption? And is 60k a reasonable counter offer with 3% sellers assist?

Below is a picture of the property.