A tenant can invite any inspector inside to determine if they have safe living conditions, like the fire department, health department, building regs, utility company, let them "tag" the place, you're just concerned about your safety! 

- what are market rents from your comps (call them, use craigslist and whatever other resource you have to get this)- what is the condition of units for your competitors (shop them!)

Since I have seen a bunch of signs around The area I live in, (Birmingham), to me it just seems to easy to buy one of the very cheap houses I´ve been offered by other wholesalers(obviously in very bad conditions, but cheap) or the cheap ones I´ve seen on the MLS, and then call those phone numbers and offer the house to them a little bit higher, but I do not know if there is a catch or what??

They now like to see fair market value for the home, regardless of condition.

Plan to rent the house for between $1200-$1300/month.Rehab Needed: The house is in fairly good condition overall (solid foundation; new high efficiency furnace; newer water heater; updated electric), but we are estimating $25k in repairs.

You could write an additional condition into your offers that your ARV must equal or exceed the appraiser's ARV estimate.  

(At this point, I prefer to hold them, cuz they'll pay for themselves in 2-3 years and keep on generating income.)This is not to take away from your good fortune, but to say that this is a repeatable success under the right conditions.

The main con with student rentals is they don't always leave them in the best conditions.

They get a plethora of tax writeoffs, tons of loans and grants for home modifications, and there are a lot of requirements as to the condition of the property or teh sale will be denied.

Having already analyzed the current market value and ARV, there was still plenty of meat on the bone.One good thing to know with foreclosures, even though the property is being sold in 'as-is' condition, you can still get credits from the bank.