Even with a manager things may arise that cause you stress and take your money.Unless lower class investing is your main focus and you have the capital and comfort level in this arena I would not do this deal. 

It doesn't affect the price.If you want a "discount" for the work needed, then you would lower your offer to the bank or suggest a credit of $1,000 to be given at closing.

If I only use the $1480 towards the mortgage payment, the time frame would be considerably longer than 3 years, that's why I don't mind paying the $500.

Just out of curiosity was he one of the lower bids?

Obviously someone is happy to invest their money on a fixed up property with lower cap rate. 2.

There are different credit requirements, but the rate should be lower. 

(rents are increasing in the area, but we are heading into fall/winter where the tenant pool is lower) Assume that you would get pretty much all your money out on the refi.

I have 2 options:1) Purchase the property cash (hopefully for a lower price) - lets say $35k and then fund the rehab ($40K) cash - so my all in is $75k + closing fees.

@Forrest Williams High crime areas is no good for anyone, unless you want to kid shot.In saying that, some people with experience don't mined working in lower demographic areas, BUT the returns are often not as good as they look on paper. 

You might want that in the first year as it increases your cash flow in a period when usually propriety performance is weak and the cash flow is lower (and that could be useful in financing/refinancing said property).