With the pipes, you can wrap them and seal it in place.

It was probably about one foot squared and it was sealed up very nice. 

I'm submitted my first offer today.Sq Ft = 1,018List Price = $65,000Initial Offering Price = $32,000Max Limit = $40,000ARV = $125,000Realtor Fees = $7,000Closing Costs (Buy & Sell) = $1,200Inspection Fee = $350Holding Costs (Personal Loan) @ 6 months = $4-6,000Total Variable OH = $14,550Rehab Costs w/ contingency = $34,900Net Profit (ARV - Variable OH - Rehab Costs - Purchase Price) = $35,550Net Profit After-Tax (Impose short-term capital gains rate at 39.6%) = $21,827Work that needs to be done:Rebuild mudroom and re-route washing machine/dryer lines = $4,000Kitchen Rebuild: Cabinets = $1,000Granite CT installed, sealed, beveled = $1,400 New appliances (may use a 2nd hand shop) = $3,500Flooring and back splash = $1,500TOTAL Kitchen = $7,400HVAC (received quote w/ ducting install) = $6,000Front porch repair = $1,000Half-bath install 12 sq ft (@ $100 per sq ft) plus cost of supplies & equipment = $3-4,000Add closets to each bedroom = $1,500Fix ceiling water damage = $2-3,000 Foundation leveling (house has settled) = $1-2,000Renovate full bath (replace tub, new vanity, replace toilet, re-tile) = $2,500Simple landscaping (mulch and shrubs) = $500Fixtures and Hardware = $1,000Contingency = $2,000GRAND TOTAL = $34,900I'll be doing the majority of the work but will have to sub-contract out construction of the mudroom, half-bath install, and closets.Immediate Questions I'm concerned about:1) Cost to rebuild mudroom.

I'd imagine that would require a full seal/paint job and new carpet each time there was turnover.  

We went $100k over budget, however, with this general scope of work, which may give you an idea of what can be involved:Rewired much of it (4 buildings).Replumbed much of it w/ pex.Extensive roof re-sealing, tuckpointing of many chimneys and exterior brick, chimney caps, box gutter relining, etc.Several new furnaces and hot water heaters, repairs to boilers in one building, duct work cleaned out and repaired.Metal wrapping of much of the exposed wood areas on the exterior, as well as door frames.Painted exterior where needed.All new windows and exterior doors.New railing and flooring for unit balconies.All new appliances throughout.Tiled kitchens and baths throughout.Quite a bit of concrete repair work outside.And of course, all the rest of the work on the interior of the units, which were all vacant when acquired.Needless to say, it's been pretty exhausting.These older buildings are difficult to estimate accurately, and this was our first project like this.

@Jacob Elbe You don't want to SEAL the interior walls and not correct the problem.  

Tile shower's need to be installed correctly to avoid moisture from getting the walls and the transition to the tub needs to be caulked to seal propperly.

Seal subfloors after removing carpet and pad.  

A modern, power-vented, condensing water heater is 20% more efficient than an older draft/convectional flue water heater.The upfront sticker price is normally <10% of the lifetime operating costs ... if you compare an older convectional flue gas water heater (EFT 0.60 - 0.75) to a new sealed-combustion, direct vented, condensing water heater (EFT 0.85 - 0.90), the newer should more than make up for the sticker difference over its life.

The consequence of missing a seal or having the wrong adhesive or something is too high.