$45,000+ for FOUR rental units...? HELP!

[Nikki Robinson]

The front building has two units - 1/1 upstairs and 1/1 downstairs.

The back building (not shown in photo) has two units also - 2/1 upstairs and 2/1 downstairs.

The owner is a Realtor who says the property appraised for $348k once all repairs are done. BUT all of the units need a LOT of work on the inside. Only one unit (in the back) is nearly rent-ready, although it still needs considerable updates.

Owner's ARV appraisal: $348k
My ARV estimate (based on comps): $220k
Est. repairs: $130k

The repair estimate is VERY padded. I'm sure the units can be reno'd for less than $32,500 each, especially since materials are less expensive in bulk. BUT it's a safe number for me to quote to potential buyers based on the '$25 per sqft' rule.

The property is walking distance to the state university in my college town. So I'm sure the units could rent for more than $500-550, but those are the conservative #s I'm using for analysis.

All that in mind... I plan to start my offer at $45k. 

... That sounds SO ridiculous to me. But that's where I want to start if I plan to try and get the property for ~$65,000 - $75,000.

What do you think?

I have a rental analysis report that I can email to anyone who wants to see the full extent of everything I've calculated. Just let me know. I'd really appreciate your input.