This is a bit too simple to use reliably, though some wholesalers do it.Plus there are 1009810948 threads about ARV and repairs right here on BP, and these 2 pieces are going to be critical to nail ASAP as a wholesaler.  

I would imagine that ANY city would prefer to have a house like that demolished to polish up the area. 

Linoleum actually is all natural and buffs and polishes beautifully.  

You hit the nail on the head - the area really is what concerns me regarding this deal.

@Carlos VegaCabri hit the nail on the head in terms of seller financing. 

So don't get discouraged if it takes a little longer to nail down the first deal.

@David Torres nails it... as soon as somebody walks down the hallway and sees that bathroom, they will (fine.. may*) be instantly turned off, and think in their heads they have to gut the entire thing.

Especially since you haven't nailed down the rents and the ARV.You should use tools like Rentometer and others to get rents for an area.

I'd say first thing is to try to nail down a budget and then a couple neighborhoods.

Andreas nailed it.