My assumption is someone's deal fell through which caused the property to go up for sale, but I just don't know.

But maybe that is a poor assumption.

The fact that you're offering him a different wage for NOT giving him a 1099 is righttttt along that line of tax fraud, the assumption is not reporting income. 

When the contractor and I drew out the plans, in my head, he should be able to give me the specs for the house before I go over to the architect and have them draw out the final permit set of plans, maybe I’m wrong in this assumption.

(once before Harvey) When they repaired it, they did some things with the assumption it would flood again...

You could easily add $100k of value this way.Speaking of value, your assumption that you're going to double the value of this property seems...optimistic.

Some starting assumptions...impossible to predict with 100% accuracy, but in general here is what you'll see:I will say this probably needs revised after this season...this market is moving rapidly...these cash-on-cash figures are probably ambitious...

It could be a million other things, too, and my point isn't to speculate about your tenant's private business -- just to say that I'd start from the assumption that the mom is acting in good faith, especially since she called from a number that the daughter gave you. 

As for the heart of your question, you are making some assumptions and forgetting a lot of other positives.

At those assumptions (bad ones), the purchase price of $76,000 seemed reasonable.