I just don't see how this would be a smart investment unless it was heavily discounted to account for any fixes that would need to be addressed.

The concept of a property making money made sense to me, but the idea of leveraging yourself so heavily seemed like a recipe for disaster. 

We bought a heavily vandalized home for $118,000 in 2015, then put another $100,000 in it.

My mentor, who's heavily invested in this market, seems to think I'd be able to charge those prices without issue.  

@Brian Garrett The main reason is that it's really exhausting, and relies so heavily on my step dad to pull those types of numbers. 

We're heavily invested in the stock market and I want to diversify some of that money into real estate.  

Thanks Nick, the heavily damaged short sale is in Indy not Ft.

I am already heavily invested/tied to Kauai, so feel comfortable with my long term positions here.  

The reason gets into super nerdy insurance but the bottom line is you will be penalized heavily in a claim for underinsuring your portfolio. 

Additionally the seller could own many properties and have a master insurance policy at a much cheaper rate than what you can get owning a single property.Unlike in commercial retail NNN where the tenants reimburse for property taxes and other costs with a residential rental the landlord is basically getting gross rent so how well the owner controls costs heavily affects the bottom line.Landlord paid utilities for residential is another one you want to stay away from.