Fix and hold rental with little potential for washout refi

[Charles Oglesby]

I have been coming across a lot of non motivated seller deals in Las Vegas and So Cal that are distressed but only discounted for the amount of repairs.  This doesn't leave a lot of room for profit for guys like me who don't plan to get in there and do the work myself.  I would still hold it for rental income but there isn't any instant forced appreciation.  

An example is a duplex that needs a complete rehab.  It is listed for 85k and comps in the area are about 120k.  It needs about 40k worth of work though.  Since this deal won't allow us to refi out any profit is it worth the time or should we pass? 

Thanks.