@Morgan Painter  To answer your question, the first step would be to review the income and expenses to determine the NOI, and compare the asking price to the market capitalization rate for the area.  

Start by determining what you want to buy and where. 

You can just reach out to them and determine which one fits your needs the best.

I would follow up to get pre-approved and determine how much you qualify for.

The owner is willing to carry the property while I do the repairs, when we sell he would then collect his $250k( the original value we determined I would pay) plus a small percentage of profit (yet to be determined). 

You now both save funds for a low DP loan on a new property and move into that renting your house out after.Who knows if that is actually a good idea or not because your financial picture is important to determine what would be best for your both. 

I would say start by determining what your goals are.

This will determine how a lender values and finances the project.I would put some more detail into the cosmetic updates -- is it just paint & flooring or will they need baseboards, trim, doors, cabinets & counters, appliances, fixtures, etc?

I hadn't really thought about enforcing this policy until very recently, when it was determined during an inspection that the tenant had been smoking both cigarettes and marijuana indoors.

However, there are several questions to think through to help determine if this is a good call.