If this house were in perfect condition: with new flooring, paint, landscaping, appliances, fixtures, it would sell for between 400-420K. 

@J Scott I thought kitchens and bath labor, gutters, hardwood and painting were all a little on the high side. 

Im currently in the finishing stages of my rehab & in need of a detailed scope of work for company I'm hiring to handle the painting, compounding , plaster & taping of the house.

So if your end product is 40k  lets break it down.. not a sales pitch or what you want to hear.your turn key company or provider is going to want to make at least 10k.. that's common in the industry.. that leaves 30k to do all this... your contractor putting it all together wants to make 3 to 5k.. so that leaves say 25k to put it all together.to have a sustainable rental.. you need New mechanicals new roof.. sewer scoped and replaced if needed up graded plumbing and electrical.. new paint and flooring.. cabinets and appliances and hot water heater.. this all cost at least 15 to 20k.. leaving you to pay 5k for the asset...

Honestly, because permits are technically required for just about everything besides paint and carpet in many places, it is pretty unusual to find a property where everything was permitted.  

Which is where we came in and made the offer at asking. 599k was a decent price. 590k would have been optimal but the seller was not budging on price because of comps. 2 reasons though he listed it "cheap". 1) The house needed TLC in terms of cleaning, painting, some flooring, landscaping, door hardware, the basics.

The house needs mostly cosmetic work, like Sheetrock, flooring, and painting. 

Someone could pay you pizza to paint a wall in their kitchen.

They will do a very intense renovation (not just some new paint) They will place a tenant and manage the property after it is sold to an investor.

. $16K Reno may be low, especially since the old oil boiler is a wildcard and paint and flooring through are a must.