The hardwood floors need to refinished, base boards missing in some rooms, paint throughout but major systems (heat/air/pluming/elect.) all in working order.She has already talked to the bank about a short sale and they have sent her an application, but they did not discuss a number and there is obviously no guarantee that the bank will accept the offer.   

(no garage) single story, lap siding, vinyl windows, laminate roof.We won't add the removal of any walls from the kitchen to the dining room (like we usually do) because this can vary depending on if it's a load bearing wall, if it has plumbing, electrical or heating to reroute, reconfigure or remove etc.

While water/sewer is easy to deal with, anytime you are paying for heat you are looking for trouble.

In the best neighborhood in Jersey City 07302.Features:Washer & Dryer in unit (with additional larger machines in building)Exposed brickControl your own heat Comes with AC units No dogs.DishwasherHard wood floors throughoutUtilities include - cold water Everything is new and up to dateWooden blinds on windowsSafe neighborhood with tons of restaurants and shops Recessed lighting throughoutUnit is located towards back of the building so no street noise over looking an urban jungle

I particularly like the 45% decrease in rent when the heat goes out rule.  

.- Property grosses $15,400/yr- 2 units at $625 and $675/month- He has all receipts and is happy to share- Owner pays for heat, all other utilities paid for by tenants- Furnace is old and will soon need replaced- Electrical is older but he said "doesn't need attention immediately.- New warranty on roof transferable to me- Besides electric and furnace, he says it should be turn key- Could use some paint- I used the BP Rental Property Calculator and even figuring in $65k (instead of $60), lower rent, painting, lawn care, CapEx for furnace ($4k and redo electric at $8k) and a few other cushions, I still come up with about 13% ROI.What am I missing?

The owner agreed to rent for 2.5 months for $1500 (including heat & electricity).

Others would tell you to wait for the spring market to heat up, which could mean a higher purchase price.  

Here are some examples of minimum requirements for conventional financing:Roofs are required to have at least 3 years remaining life.Pools must be clean and operating.FNMA requires the comment, “Water and Power were turned on and operating properly at time of inspection [appraisal].”Heat is required, but not A/CNo serious structural issues.Kitchen must have a working sink and cabinets.Don’t need appliances.

They would be smoking in the house, leaving all the doors and windows open after they'd leave for the night, in the middle of a Michigan winter mind you with propane as the heat source and that's not cheap.