I understand they are planning to to offer recordkeeping and plan document maintenance services to Quest clients with no cost to transition. 

Any marketing should always be based on the information provided by sellers in a deal. 

And if you base an offer price on that, you'll likely have an extremely difficult time getting any traction. 

The city wants to tear the property and surrounding properties down Zillow said it’s worth 38000The city offer me 13000.I could use some adviceHard to give advice with limited information, but as a general rule, the longer you wait and the further down the line their project is the more valuable your property will be to them.Zillow (and all automatic online) estimates are very unreliable, so don't base on that.

Quote from @Derrick Roland II: "but based on my pre-approval"  This is the most important phrase of your post.Where did you get that pre-approval? 

If you get another offer then a kick-out clause to kill the first offer.  

However, a common benchmark is aiming for at least 6-8% cash-on-cash return based on your total investment (purchase price + rehab + closing costs).Always factor in appreciation potential, tax benefits, and personal risk tolerance.

I think it is fair to say that there is somewhat of a tradeoff between markets that provide positive cash flow on day one and relatively high appreciation-based markets.

How are you paid and are those distributions underlying property performance based?   

The property is likely a little too expensive for me to qualify for with a conventional loan based on DTI.