For example, California has an $800 minimum franchise tax, while other states have lower fees or no franchise tax at all.

Maybe I got lucky because this was a few years ago and with lower prices and lower interest rates, it was easier to do well. 

I noticed the seller started out trying to sell it for $800,000 but he was lowering it pretty aggressively.

I have several CFO clients that do similar heavy rehab projects in the Midwest (albeit with a lower purchase price), so you can definitely make the numbers work. 

The worst they can say is no and give you a counter, or they ignore you and you try again a little higher, or wait a few weeks and try a little lower.

I really wanted to try finding a duplex that i could immediately rent out the lower half rather then buy a SFH and have a higher mortgage overallHow did you find this deal and how did you negotiate it?

If it is someone you know you can give them a straight return as if its a loan - can provide a lower interest rate to provide upside - it really depends on the lender and what are they concerned with and what is their risk profile. 

Taking these two pieces of info will tell you how long you will take to get an offer, so if you go past that you should lower the price, and then the other action item would be to starting off lower than all the other properties if the condition is better than your condition.

As another poster mentioned rates are lower than they've been in the previous 18+ months but unless some very surprising economic data comes out between now and when you did your refi it seems unlikely that rates are going up in the short term and there is at least a decent chance that rates drop a little more before then. 

However, it’s also a requirement for properties with lower-level units that could be vulnerable to flooding, even if those properties are not located in a designated flood zone."