Acting safe or acting scared?

[Micah Redden]

Looking at a SFR deal as a result from direct mail marketing but I am waffling on the 'What Ifs'. This is a 3/2 in my local area that can rent between $1100-$1200/month. The owner (retired broker) owns it free and clear and will sell for $75K. It will need about $3K in general flooring, paint and fixtures to put in a new tenant.

This is basically a no money down deal where I can purchase with my LOC and then refinance at a LTV of 75%. Would need an appraisal of $104K. The rehabbed comps in this neighborhood are selling for $110K.

My area of concern with this house is that it will probably need the polybutylene plumbing replaced soon ($8K expense) and eventually the pressboard siding ($9K expense).  If any of these came up in the next two years I would have to pay for out of my personal pocket and would substantially stymie the development of my RE investing.  However, looking at a monthly cash flow potential of over $300 is very enticing.

Can anyone help me on the risk vs the reward in this scenario or show me an option I may be overlooking?