EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

I'd love to see a copy of it as I'm dealing with a potential tenant who's pushing things a bit.

In your scenario you'd have a potential tax event on that $200K difference.Here's a creative way to access most of that money tax free however. 

I love it here because there are still positive cashflowing deals and lots of appreciation potential due to the strong job market, growing population, and major companies setting up shop here like Intel, Meta, Amazon, etc.

A potential tenant is interested in renting my 3/2 house.

Done multifamily, SFR, STRs... and finally found the niche that I love the most and believe has the most potential for decades to come.

Basically, the further you get away from the city the more potential for cashflow, but you're also dealing with a different tenant base that may be tougher to manage.

The deals are really so sparse that you can sit and wait and wait and wait for the right deal in a specific neighborhood or you can look at all potential deals across the Metroplex and beyond.  

Besides the higher down payments, higher interest rates, and potentially shorter terms on commercial loans (all easy to underwrite with a couple calls to lenders), commercial deals in the 5-20 unit range are not much different than a 4 unit.  

First, estimate what the renovation would cost, how long it would take, and how much extra you could potentially sell the property for once it’s fixed up.