Initial cost is driven by home buyers making it too high and rent is rarely sufficient to cover expences.

At 5% interest, that would be $45K a year ($3750/mo) to the seller.Problem is, that $45K would only cover the interest on the $900K.

This will cover everything....

There is about $50,000 in repairs that need to be done but he is including a $50,000 "gift certificate" to cover those repairs, which is pretty sweet.I definately know I can make a profit fromt his home when I put a buyer in it, but how can I convince him to go down below $1M?

I have ran into a few deals to flip and wasn't a big fan of HELOC, am I missing the bigger picture by trying to sell the property to buy a rehab?

No HOA, it’s a small lot, no laundry facilities, non-covered parking. 

Regardless, even when I included insurance, the total expenses were about 33%, but I usually make my operating expenses at the industry average of 45% and that assures me I've got things covered. 

Your pictures show the sheetrock has fallen off the ceiling.

Per the other questions re: Repairs and market rent - Yes and Yes, but I may want to consider negotiating this portion so that I am covered further. 

Go luxury sooner, so your commissions are higher than the sub-$300k stuff that a lot of Realtors are more comfortable doing and if you land a big listing, you could always partner with another more successful luxury Realtor who would be happy to co-list and cover the cost of the luxury marketing if you're bringing the listing to the table...Hope this helps!