A real estate agent, and I am trying to help my client decide whether he should finance or not. I have a a summary of financing fees and charges for this deal. These will be a $85,000 distressed property with a $102,0...

His advice will work for you if you have the correct measure of intelligence, experience, and willingness to work hard at it.I think a better option is to hire a property manager with the expertise and connections to handle it for you. 

It's great that you're considering the option of building a rental property instead of just selling it outright.

That is the best option or simply ask your neighbour (and get it in writing) that you can put the fence in the same location.

I source all my deals direct to seller.

., you might be cutting it way too close to really do anything. 15k is the bare minimum I suggest for reserves or oh no money on any project so that doesn't leave you a ton left to work with.As @Glenn Banks said, 203k is probably your best option because it's an FHA loan and you can do low money down and the reno is baked in, but the reno is complicated.

Again I'm just exploring my options as this is my hard earned money that I'm spending and I'm not an iron fist person but like to be "fair" and "punctual" with any business.

You can apply this model to different types of real estate but multifamily, mobile home parks, and hotels are better options given the ability to buy larger assets over time.

Or is your only option to tear down the current structure and build new?

I'm not sure if @Jeff Chisum can do a condo or not, but he may be an option for you.