He said he's completely gutted and flipped 15 houses last year, he showed us pics and the work was impressive.Neighborhoods felt very nice, but surround areas seemed a little more rough (strip malls, etc.)

Start by running the numbers through a comprehensive rental analysis calculator (the one on BP is great), and get a picture of what your real cash flow picture looks like after you account for *all* expenses.I don't know what market rent is in your area, but if you have one or both units at below market value, you should definitely find a way to increase them.But, my gut says this property is still going to struggle to cash flow.

Basically a gut renovation.

Say walls are still up and flooring in but it needs to be gutted more?

My wife and I's first home was a short sell that we had to just about gut and rehab. 

4.Be prepared for Mission CreepIf you’re doing anything less than a full gut renovation, be prepared to deal with “Mission Creep” from your contractor or architect, which goes something like this: “Well, as long as you are doing this, you might as well do that too.”

I called the owner , we met an hour later , I walked the property and house ( total gut ) . i handed him a contract ON THE SPOT .

(be more conservative with this number than bullish)Then I would look for a property that is in a distressed condition, but one that you are comfortable with (focus more on out dated vs needing full gut rehab).

ARV is $900K on this house (Summit NJ, train access NYC) and reno timeline is 3.5-4 months (we're dormering an unfinished 2nd floor to add master suite + 2BR + BA, gutting first floor, finishing basement). 

Hey @Andre Valdes,Rather than tear down, have you evaluated doing a gut renovation to bring the property in line with the rest of the neighborhood from a  fit & fittings standpoint?