Purchase price: $80,000 Cash invested: $2,400 3 bedrooms, 2 bathrooms, 1,750 sf.

The cabinet/vanity area in one of the bathrooms and the kitchen countertops need to be replaced.  

Bathrooms!

You can never prepare fully and you will always be able to do it better, I would recommend buying your primary as a live in flip or house hack first, it is hard to mess up if you approach the purchase with just a few calculators and make sure you have some equity starting off by buying it at a discount.

Updating entire house and adding a bathroom/finishing basement!

Full gut/rehab (3/2 SFR) 2020 2021 April Multiplier Materials* Materials % of job Multiplier Labor $ Increase 01: Plans / Permits Plans / Permits $ 5,000 $ 5,500 10% 0% 10% $ 500 02: Demolition $ 5,000 $ 5,500 10% 0% 10% $ 500 03: Foundation $ 20,000 $ 22,000 10% 50% 10% $ 2,000 04: Roof / Gutters $ 17,000 $ 18,870 12% 50% 10% $ 1,870 05a: Exterior Paint Exterior Paint $ 7,000 $ 7,700 10% 50% 10% $ 700 05b: Siding $ 5,000 $ 5,500 10% 50% 10% $ 500 06: Windows $ 5,000 $ 5,500 10% 50% 10% $ 500 07: Garage $ 5,000 $ 5,500 10% 50% 10% $ 500 07b: Driveway $ 5,000 $ 5,500 10% 50% 10% $ 500 08: Framing $ 5,000 $ 9,500 170% 50% 10% $ 4,500 09: Finish Carpentry $ 5,000 $ 9,500 170% 50% 10% $ 4,500 10: Sheetrock / Insulation $ 20,000 $ 22,000 10% 50% 10% $ 2,000 11: Interior Paint Interior Paint $ 7,000 $ 7,700 10% 50% 10% $ 700 12a: Flooring (laminate) Flooring (laminate) $ 5,000 $ 5,500 10% 50% 10% $ 500 12b: Flooring (carpet) Flooring (carpet) $ 5,000 $ 5,500 10% 50% 10% $ 500 13: Kitchen All new cabs & countertops $ 7,000 $ 9,940 170% 20% 10% $ 2,940 14: Bathroom $ 5,000 $ 5,500 10% 50% 10% $ 500 15a: Plumbing Rough $ 7,000 $ 7,700 10% 50% 10% $ 700 15b: Plumbing Final Fixtures, water heater, garbage disposal, dishwasher $ 2,500 $ 2,750 10% 50% 10% $ 250 16a: Electrical Rough $ 7,000 $ 8,400 30% 50% 10% $ 1,400 16b: Electrical Final Fixtures $ 2,500 $ 3,000 30% 50% 10% $ 500 17: HVAC Work $ 5,000 $ 5,500 10% 50% 10% $ 500 18: Appliances Range, Garbage disposal, dishwasher $ 4,000 $ 4,400 10% 0% 10% $ 400 19a: Yard Cleanup $ 2,000 $ 2,200 10% 50% 10% $ 200 19b: Fence $ 5,000 $ 9,500 170% 50% 10% $ 4,500 20: Basement / Crawlspace Vapor barrier $ 3,000 $ 3,300 10% 50% 10% $ 300 Contingency Stuff happens $ 5,000 $ 5,500 10% 50% 10% $ 500 trash haul Final trash load $ 500 $ 550 10% 0% 10% $ 50 mow lawn $ 500 $ 550 10% 0% 10% $ 50 Staging $ 3,000 $ 3,300 10% 0% 10% $ 300 $ 180,000 $ 213,360 $ 33,360 16% Does this make sense?

That's when you can get the biggest discounts.

You can buy real estate at a discount that way, but it’s often in bad shape.

I would keep them but I have to totally rehab the garden unit they are in, jack hammering concrete and fixing exposed plumbing as well as gut a badly done bathroom. 

My general opinion is that flood zone buys are great options for buy and hold investors because you can buy at a discount, but rent at a premium (if it's nice).