First Time House Hacker Here. What's BP think of this deal?

[Steven Booty]

So I've been renting since college and got bit by the real estate investing bug about a year ago. I am now ready to buy and house hack a multi-plex.

I have $20k for a down payment for a FHA style loan (I'd only put down 3.5%) at ~3.8% APR. No debt. Currently saving $1k a month.

My agent sent me a duplex about 30 mins away from my job. The list price is $249,000 and it looked pretty good from the outside - new looking vinyl siding, new looking roof - so I decided a walk through was necessary. Check it out: 138 County Rd, Cliffwood, NJ 07721. 

Seeing it in person confirmed the first two observations: siding and roof are almost brand new. Inside? Not so much. 

I give the house itself a C or C-. The walls and floors were in terrible condition in both units, but nothing I couldn't paint over/tear out and replace. Some windows were new looking, maybe 4 need replacing. I've calculated that installing new floors and painting, little bit of landscaping, et cetera would cost around $15k if I did it all myself (one thing that's helpful: I wouldn't have to rehab the 3 bedroom right away since the tenants would be staying).

The bottom unit is a three bedroom, one bath currently rented on paper (still have yet to see a lease) for $1,600/mo, with section 8 paying $1,200 of that (have documents to back this number up). Top unit is 2 bedrooms and 1 bath. I estimated $5,600/yr in taxes and got an estimate for $1,016/yr in insurance. I think I could easily get $1,500/mo for the 3 bedroom after I fix it up and at least $1,100/mo for the two bedroom (assuming I'm not living there). Nearby comps are kind of wonky as they are mostly newer(ish) apartments. I'm still not sure if I'm comparing apples to apples.

Gas, electric, and cable are metered separately. Each unit has its own gas water heater and gas-fired boiler for baseboard heat. No AC. There is a washer/dryer (gas) hookup in the basement (no units present, but I have my own). The problem is that only the 3 bedroom has direct access to the basement. I would strongly consider running lines to the top unit. I wouldn't install units in the 3 bedroom until the current tenants moved out.

The neighborhood seems to be maybe C+/B- and it appears to be on the up and up. Many houses look recently renovated (including one next door) while only a handful look neglected. 

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I have a number in mind to offer, and the numbers work even in its current condition (assuming $2,300/mo total income, again assuming I don't live there) but what do you think? What would you offer?