Absolutely.

Interest only, low interest cost, can be tax write off.

Since you only invest in markets of 100k or more, you are saying you would pass on an absolute steal in a market with 80k ?  

My offer on a REO was rejected as too low - the issue with the townhouse is listed at (1)"system did not hold pressure due to damages, unable to find source of allleaks, water heater damaged at side where TPR valve damaged" and (2) "Water Supply and Sewage system was inspected for presence of obvious visible defects.

Being licensed I will get paid a commission on the buy or the sell or both in some cases and he will get paid by buying low and selling high on the homes that I find him.  

I would replace with batt insulation if you are doing it yourself...easier to work with and readily available from Home Depot, Lowes, etc.  

You will likely have a difficult time finding an agent to prepare a low ball offer like that because the likelihood of winning is so low.

At the moment, I am a little low on start-up capital but can provide all the construction, rehab and management.

Kyle,To me the COC return is low, but I try to focus on forcing appreciation through rehab and refinancing with little to no money down when I'm done.  

Especially while rates are still so low.