For a turnkey property, in an "A" neighborhood, a reasonable cash-on-cash return might range between 5-8%, since these areas tend to be more stable but with lower returns.

From what was available, rooms seem to be renting for around $1000.

Be careful out there....some of the new builds are not comparable to the old builds....many of the newer ones are all siding, no brick, no light fixtures or ceiling fans...just LED recessed lighting...no doorbell, no garage door opener, no attic stairs, one piece tubs, vs tiled baths, no landscaping, no trees, and on and on....they've taken out virtually every single cost.   

Here are some good place to start:http://www.biggerpockets.com/meet- find and connect with other BP members that are in your area.http://www.biggerpockets.com/alerts - Set up keyword alerts to be notified of the topics that interest you.And, of course thehttp://www.biggerpockets.com/forums - ask any question about real estate!

Any advice on the situation would be greatly appreciated.

If we choose either option, are there things we should be aware of?

I will explain much of my plan and I can show you what I have accomplished as well as my general idea and goals for next year.

The South and Midwest are pretty well known in that regard.

I brought a partner into this deal to get it done, I will be funding the rehab portion of this Fix and Flip deal.

the house has a bunch of equity, being worth about 750k when fixed up.I  know that on a standard convenetional mortagage foreclosure, there usually additional fees such as unpaid interest, attorney fees etc, apart of the princiapl balance.Is there a way to conservatively assess what will be the actuall "Pay-off" on the 1st?