Is this deal worth it?

[Phillip Rowe]

Looking for my first rental and had a proposition from a friend trying to get rid of his. It’s a house he owned then turned it into a rental. Comps in the area are in the 175-185k range. He owes 130k but the house needs 40k in rehab if you sell it. He wants out and will sell it to me at 110k and 1/2 closing cost. The current renter has been there for 7 years and always pays his $1,000 in rent on time. Downfall is that they don’t take the best care of it or even tell them when things break/water leaks etc. subfloors in both baths have mold and rot and will need replacing. I’m a contractor so it’s not that the work bothers me. I was thinking about doing the deal and letting the tenant stay since the damage has been done! Maybe take a home warranty out though! If I buy it and the tenant moves out it may ruin this deal because I couldn’t get another tenant in there in the current condition and not sure there is room for a decent profit if I flip it. what are your thoughts?