Pricing a rehab / flip next to a house i just purchased

[Steve S.]

In the Waco area, I recently purchased an 1,800 sq ft house (built in 1977) that appraised at $150,000.

The owner of the house next door is looking to move.  He said he has the following issues with it and hasn't taken good care of it the last 15 years he's lived there (also built in 1977):

- rotted wood all throughout the roofline

- brick wall venier on one side of the house is falling apart

- sheet rock in many places needs to be replaced

- cabinets have never been painted or stained

- carpet is over 20 years old

- linoleum floor in the kitchen and hallway is yellow and peeling up

- walls haven't been painted in 15 years

- septic issues

- a couple of leaks in the roof

- possible insect / termite issues

Supposedly a lady has offered him $80,000 for it.  It's about 1,600 sq ft.  

I'm wanting to determine if there's an offer i should make above that could still be potentially profitable.

Thoughts / ideas on how best to do this?