Also that is a rare repair even in older homes. 

Again, this is with commercial/investment property; owner occupied or consumer loans may have legal issues rendering this technique non applicable.  

Assuming you sold the home at the end of 5 yearsYour NET ROI would be:0% appreciation: 10.93%1% appreciation: 12.13%2% appreciation: 13.33%3% appreciation: 14.53%This ROI calculation takes into account taxes, insurance, selling costs, repairs (calculated at $3500) through out the lease.

Should I continue to pursue the original house deal by deducting their estimated repairs?

A two month vacancy costs you a minimum of $6,400 plus repairs, paint and eviction costs and 26 months later, if no other problems, you have broken even10.

While they often require some level of repair or renovation, the potential for significant returns makes them an attractive option for many investors.Why Invest in Distressed Properties in Phoenix?

Maintenance and potential repairs will also require a long-term financial plan and setting aside a contingency fund for such expenses.The steady cash flow, appreciation over time, and tax benefits can make a meaningful difference to your wealth in the long term, especially with the principal paydown on the mortgage.However, if managing the property from a distance feels too burdensome, or if you’d prefer the certainty and flexibility that comes with having less debt (especially given the high mortgage rates), selling and using the $100,000 in equity to reduce your loan for your next home may be the smarter move.

Are you looking at the maintenance/repair costs of the homes once in place, W/S/G costs. septic expense if applicable? 

Purchase price: $65,000 Hybrid Fix & Flip, bought, made minor repairs and clean out.

Quote from @Stetson Oates: As a suggestion, when you refer to net cashflow, I would include maintenance, vacancy, and repairs.