They give you a 30-35% discount when you combine.

Or some combination of things might be best for you.  

If their combined income qualifies them for a 119k house it's likely a big purchase from their perspective.

Especially in hotter markets like Sacramento.Back during the crash, banks were dying to get this inventory off their books and recoup what they could, and so you could buy them for pennies on the dollar.But eventually banks got hip to the idea that the public started to think REO's were automatically a good deal, and combined with a booming housing market they're selling at full market value now.

So, if you're not going to do the work yourself, or if you don't have some magical contractor that can do it cheeper (and better) than anyone else, the only reason not to buy it finished is if the price you get it for, combined with the price you're paying to fix it, combined with a very healthy margin for your risk and the inevitable surprises....

If you want a specific CoC return @Justin Fox gave you an easy way to set a CF goal.If it were me, I'd figure out my goal and throw the relevant data (rate, appraised value, LTV, Op Data ect) into excel and have a data table show me what my CF looked like under different circumstances (ie. varying combinations of LTV and desired return) Then, assuming I had its modeled out, I'd do the same for IRR. 

Since then the 3 homes have had a combined value increase of over $1.2M (the rentals being 800K of that), and we have collected over $300K in rent over that period of time.

Obviously the reason for the final price is a combination of both.

@Adam Soyak and Account Closed is your guy.Or use the modern technology and work with any of the tax accountants on this forum remotely.

I'm curious as to how folks on BP are tracking asset/investment performance after closing.Most investors I've spoken with use some combination of custom Excel spreadsheets, Quickbooks or an alternative, and somewhat tedious reports from property managers.