Unintended consequences strikes again.  

Pepper spray, stun guns, tasers, knives, handguns, hard objects for striking (kubotons or other things that be put on a key ring) are legal to possess, carry, and use in some areas and not in others.

Of course the likelihood of being able to completely eliminate the rehab and closing costs is probably close to zero, and that puts your cashflow with self management and not factoring that cost in (again, not recommended) only about $100/mo so this really doesn't strike me as a good rental property option.I would take the $13k and call it a day. 

You are best to have an option contract  which gives the buyer the right to purchase at an agreed upon strike price (or an agreed upon mechanism for setting the strike price at the time of exercise) and a separate lease agreement (using the standard form of lease in many Provinces) at market rent.   

Maybe it's just me, but this strikes me a little wrong.  

Even assuming 60% expenses and a 30% down mortgage at 5.5%, you're looking at like $4k/month cash flow, or a 35% CoC return.I've got a friend who lives in Austin, so I've spent some time there and know it isn't exactly Chicago's premier neighborhood, but it doesn't strike me as a terrible area either.  

The higher equity spread is much more comfortable but less likely as a strike price level from a seller stand point.

Investor has a built-in exit strategy with a previously negotiated strike price prior to buying.

I said I only loan money to friends and people who don't owe me money, that's two strikes on you.  

@James Wise  I seem to recall from my high school history lessons that those that got rich in the California gold rush were not the miners but those that sold the mining pan's hardware tac and other services to those that wanted to strike it rich.. ( now to be fair I went to high school in Cupertino CA and we learned CA history)...I have no clue on this system or this individual however its just a general comment that while folks can and do achieve great things in RE its generally folks like @Christopher McClatchey  who have formal education means ( which is important) and ability to execute that get rich in Real Estate..