Practice Analysis, possible first deal?

[Tim B.]

New investor looking at analyzing a property. I was initially considering this as a potential buy and hold, but am thinking that it may not be a very good investment. That being the case, I wanted to go ahead and use it as a practice analysis for myself and perhaps others.

Here's the info on the house, http://www.zillow.com/homedetails/405-SW-Richwood-....

The house was built in '74. I drove by it today and it definitely needs a new roof and perhaps some rails on the back deck? There used to be a hot tub on the left side of the deck. It appears the HVAC system is pretty old. I would assume the water heater is about the same age. I'm figuring that it's going to need new paint, flooring (maybe just cleaning), some repairs to drywall and door frames, interior doors, and perhaps power washing of the exterior. I'm figuring at least $10k (5k in the roof alone???) in repairs; however, am not an expert by any means in estimating these costs.

It's REO owned. They're asking $77,500. If I go through with it, I'd like to offer a bit less, say $60k ish (but not sure on the likelyhood of them accepting that offer). I'd put 20% down and finance the rest. I'm thinking that I could rent it for about $1000-$1200 a month based on comparables. The property tax runs right around $2,000 each year. I figure ARV to be around $100,000-$120,000. It's not a terrible neighborhood, but certainly not great. There are some apartments/townhomes just a block away from this property. It does; however, have a good school district. I figure if I rented, I'd target a single family or perhaps an elderly person/couple.

What are your thoughts?