Credit is shot due to her getting hurt at work and major problems with workman's comp, disability etc.

I can't refuse, it's a decent property too, before market crash was appraised in 250 range.  

It's a whole lot slower moving than LA, and industry is more concentrated.Just make sure you're buying in a decent area, and if you leave yourself some room for rents and valuations to go down you should be fine.

The lack of cashflow pretty much kills the deal, because the whole project becomes based on potential revenue of the flip... while the cashflow will not increase for any other investors as well, so it could become hard to sell at a decent price.

When analyzing deals, I like to shoot for as high an IRR as possible while still maintaining a decently positive cashflow buffer to prevent me from having to pull money out-of-pocket for common expenses.I've been looking into the Wissinoming area of Philly as well, seems to have an interesting value proposition.

Orange is a decent place to find properties at that price. 

 - We have decent/good jobs and have some cash to invest ~20-30k.  

(Not sure if the linky thing worked or not, but I gave it a shot!)

., HELOC on our current house, construction loan, etc.) with goal of being in a decent cash flow position preferably in a couple of years. 

There are some decent books around too.Foreclosures and pre-foreclosures are very state-specific.