If the house is not that old your contractor is probably correct on fixing the issue.

Abel, Thank you so much for your reply and advice.

@Gabe Amedee Thanks for your reply.

I'm not sure if I understood you correctly.

If my estimations are correct, he owes approximately $190000 on a home that in my local market could potentially command $240-250,000.

Thanks for reply.

That will get you the proper coverage and you will know the correct costs from the start.

@Jennifer Kobasic I think the deal looks like it will cashflow as you mentioned, but if you're in it for the returns it seems you'll get about 3% cash on cash return with 20% down (assuming you do zero repairs/upgrades) - and probably more like 2 - 2.5% when factoring in closing costs (others correct me if I'm wrong please) - I think most investors look for 7% or more cash ROI though.  

And the point of my posts is that you MUST know the CORRECT value of the property in order to analyze the deal or decide anything.

also the second reply is a good one with networking with realistate firms for upcoming deals id suggest setting up a new email so its easier to look threw it as i made the mistake of using my primary and sometimes ill miss a deal because it was under the flood of nonsense emails.