Is it worth it?

[George Firn]

Ok, here's what I know.

It's a 700 sq.ft. 2/1 SFH, crawl space, no garage. A realtor friend pulled comps and they are $60,000 - $70,000 fully renovated. I am looking at it as a buy and hold property but maybe it makes more sense to flip it? Based on other rentals in the area I am conservatively saying it will rent for $800/mo.

It needs a full gut, new electrical and new siding.  I am having a contractor friend run the numbers but I'm guessing $30,000 for the reno plus holding costs.

The owner is asking $30,000, I have not started the negotiation yet as I was waiting for a better idea on the reno numbers first.  I don't know if he's willing to go lower yet or what kind of down payment he is willing to take.  I know he owes several thousand in back taxes, which he said he would pay off if I purchase it.  I am planning on getting that in the contract if I move forward with it.

As of right now I am planning on asking him to carry back the financing.  If purchased for $30k and I put down $10k that would be approx. $200/mo @ 3% for 10 yrs.  This would be my first deal so I have no idea what an insurance policy would run.  I would like to factor in property management even though I am planning on doing it for now.

Is there anything else I'm missing?  What do you think?  Is it worth it or do I move on and find something that will take less time, effort and money?  

Thanks in advance!

George