Need advice on a deal I am working on.

[Katherine Thorndike]

I a fairly new at this and panic every time I have trouble with the analysis.  Here is the deal:

A 1,126 sq ft cape with an attached garage.  2 bed/1bath built in 1958.  Hasn't had much done to it sine 1958.  No septic design on file, common for this small NH town. Located in a desirable area.  1/2 acre.  4 foot crawlspace/dry.

Similar rehabbed homes sold last year for $130-140k   Rental rates about $1,100 per month.

I know the neighbor and original owner of the home before he sold it in the 80's  He gave me some good info on the home.  Because the home was owned by a single woman with health issues, the home is in disrepair but not abused, other than her dogs ruining the carpets.  Here is what it needs and my calculations for investment analysis.

Needs a new roof, new windows, flooring throughout, new insulation in the attic, update kitchen with new cabinets, refrigerator, painting and other minor repairs.  The furnace is old but working (oil) and the well is ok.  To flip the house, a full dormer on the upstairs to put a bath on the second floor and increase the size of the two small bedrooms would probably be wise while doing the roof.  There may be some structural problem with the roof as the neighbor said he can see that the knee wall seems to be pushing up on the roof.

I have no idea how to quickly get the numbers on all these renovations.  Although my son is a carpenter, it takes him a while to get estimates to me as he is busy.  I can't get anyone to give me quick estimates for auctions or other fast sales.  This one is a short sale and multiple offers have been put in since it went on the market 2 days ago. Houses sell fast in this town.

 Is there a standard way to figure on things like flooring for a house with 1,126 sq ft? This cape is like all the other capes I see.  Nothing unusual in the design.  A dormer would be 32 feet (the cape is 24 X 32. 6 or 7 windows.

As for figuring out what to give for an offer.  My numbers for income for a rental are $9,737. If I mortgage 60,000. I will have to deduct that payment from the income so the yearly income would be $6,293.  The house is listed for $125,000. but that is unrealistic.  The neighbor offered the bank $80,000. for the short sale but that was rejected.  I can't imagine offering much more than that.  But if I figure that the rehab costs might be $30,000. (just a wild guess at this point) If I offer $85,000. the cost of the house after reno would be $115,000.  How do I do the calculations for Cap rate or cash on cash return?

I know this is lengthy.  I have to put in an offer by tomorrow to be considered.  Need some help.  Thanks to anyone who can give me some advice.

Katherine