The deal is a live because of this potential partnership.For this deal to work, the Construction Costs and Environmental remediation variables need to be answered to determine if this is project is a “Go!”.

Overvalued' is not a function of absolute prices only, one needs a comparison variable (typically income) to normalize prices by, to determine if something is overvalued.

The most variable expense is water.

Oh, but don't forget to deduct tax on that).I reckon there are just too many uncertain variables to risk paying (at least) $89k on a home that sold comps say should be worth $99k (if rehabbed to market satisfaction).Looks to me like the "seller" is a wholesaler, looking for a flipper-wannabe to whom $10k seems magical... 

Understanding the lending process and variables will save you time and money once you locate the deal you want to close. 

Also my husband is a finance guy and is very concerned about the variable rates going up with no cap.

Then you can purchase properties at cash prices with good variable rate.  

How your 401K fits into meeting your financial objectives during that time would depend on a wide variety of variables.

I do see that there are quite a few variables to the equation that should be taken into account, so again my thanks for making me aware of these.  

Predictably the answers are all over the place, since people's skills and talents are greatly variable.