@James Solis evictions don't report tenants that damage properties when they move out, or do other crazy things while paying rent.

Regardless definitely get all of the information and I recommend walking the place with a contractor you trust initially to get a feel for what kind of work it might need.It has some termite damage and generally a bit dated.

Recent water damage due to a busted pipe..they were on site the next day and I had a check for damages in just a few days. 

Love baking that into my lease that it will be paid for by tenant within 7 days of move out or will be deducted from their damage deposit for leases here forward.  

The home is a 1900sqft brick ranch 3/2 with a nice layout but it has been neglected long enough that there is definite water damage.

Unfortunately termite damage can extend into the in areas that are not readily accessible (covered by sheet rock, paneling and such).

. $500/month rent with no mortgage would mean about $150/mo for adequate insurance plus taxes.That leaves $350/mo to cover PM, which will be hard to find a good one in that kind of neighborhood, then there's vacancy cost, tenant damage, capex like roof and heater, plumbing repairs.It's good that you are looking for other ways to make a deal work, but I would pass on this one.

I have approved these types of tenants in the past and though most are solid some are careless with my rentals and cause more wear and tear or damage than I am comfortable with.

Are you able to inspect it to see if you "tenant" is still their and not damaging the place?

As for income, instead of $800 per month for a 3 bedroom you can rent it out at $350 per bed.The downside is you have more turnover, the students do more damage than normal, they have different expectations of amenities, and it's harder to get loans for large complexes.