Possible rental purchase

[Michael Kim]

Wondering what people think about this buy/hold deal in Southern California

Purchase price: 230K

Rehab estimate: 70K - rough estimate

Rent: 2055/month.  3 years left on lease (long term tenants, likely will not move after lease is up)

Comp sold in area:  340K-350K for similar house.

Even though the house needs tons of work, nothing will likely be done until current renters move out.  Their lease is up in 3 years, but they may not even actually leave.   The rehab will likely be extensive if done as everything needs to be fixed.  

Pros:

long term renter with good history.

long lease - hopefully no vacancies for a long time

may not need to rehab for years if tenants stay

buying at about 50K below sold comps in area

Cons:

rehab will be costly when it needs to be done

low cash flow based on cost of house/rehab

Would appreciate your opinions...