Account for all costs, including closing fees, holding costs, and repairs.

To me at my current knowledge level, this deal only works if taking over the loan - to limit the out of pocket money to acquire the property since the outside reno and new septic would take up the bulk of rehab costs. 

.🔹 Insurance Challenges – Even when insurance pays, it rarely covers the actual cost to completely rebuild.

Have done some preliminary research and will do a deep dive, just wanted to see what folks thought of there were any obvious reasons why or why not or any markets similar that I should be considering.

This approach ensures realistic pricing and helps avoid unexpected costs later.Good luck!  

You can always consider doing a cost seg study on a property that you buy and that can also help with tax benefits if you cannot qualify for the real estate professional status.

If the applicant comes from the pool of people that I or my tenants know, I use real estate as a way to give back as many of my tenants will not qualify credit wise or may even have a criminal background or would struggle for another reason if I were to just stick to the "background/credit check" criteria. 

What is anticipated legal costs?

Bad contractors are one of the main reasons why first time investors never do a second deal.

Short term it is difficult to make the numbers work, the cost of new construction and the time it takes to zone-plan-build are usually the main reasons why private investors stay clear.