Through our prior conversations my back ground in engineering has come up and he has said that that interests him as he says his mind does not work in that way.

@ari yenjai basically it is just reverse engineering the loan the your seller took out and calculating how much he would have paid down in 8 years. assuming he is not in default.

I am an Engineer.

@ Bill Gulley Bill,I'm 38 years old,electrical engineer since 1998...Professional education not only give us an expertise on specific field also prepare us to overcome challenges,displine,etc.....I can recognize when i'm wrong ,so yes i will follow your advice and take some basic real estate class.Can you advice me what you consider a good start?

Say you have it insured for $200,000 and it burns to the ground.

I've got friends who got burned in KC as well.

My previous career was a Med Dev engineer, Currently a Sales Rep for a Med device company.

It would not be bankable at that price because it will not even make the appraisal and will not meet the coverage ratio on the debt more than likely.The extra land to expand story is as old as the industry has been around, and means nothing without an actual permit to build in hand, and even then you will need to price it out (around $20,000 per lot plus land cots plus tap fees and engineering).I would price this deal more at around $550,000, which is a win/win for both buyer and seller (assuming you can still push rents based on market).

I can do most of the work as long as I don’t get burned out. 

I'm no structural engineer or architect but looking at the drawing, Is it possible to pitch the roof where the high point connects the center of the wall with the fireplace to the other pitched roof?