But on the surface it will need some work and some money. 

You should consult with an agent or lawyer by the fact you are actually selling an option on your property $500 is way too little for the privilege and you need to get the buyers financial statements to even see if he is a possible buyer .On the surface it sounds like he is shopping your property around . 

It looks great when the building is brand new, but without a good power wash every year or so, the aesthetics deteriorate quickly - dust will accumulate on horizontal surfaces, then get washed down the face by rain - leaving ugly dark stains down the side.

On the surface , rents seem a bit low based on being so close to a major metro unless the markets maybe not so great. 

Every couple of days, just spray the surface and let dry.

Alternatively, perhaps I'm missing something beneath the surface on this renovation that increases its value vs recently renovated comps - i.e. the new electrical and plumbing; or the fact that it is a "full renovation".

Even if the actual temperature is below freezing if it isn't too windy the surface temperature of the roof will melt your shingles together quickly once installed.

On the surface, your stated numbers look good.

Not really, if your optionee buyer goes to get a loan, the deal is going to surface and the lender will be looking at as a sale, then the appraiser, then perhaps FHA or Fannie, here comes the parade. 

On the surface this seems to be doable (it would be an issue if it was the same property), but I suggest you discuss the specific with the qualified professional.