What you were saying is you plan on the property eating through your $20k and if the property does not CF you will be adding personal money to it.

They lose their deposit, and we just eat the cost.

Generally just eats up cash flow and doesn't provide much on the back end. 

Note short term would have selling costs eat much of the appreciation and thinking short-term appreciation is guaranteed is risky. 

YEARS of animal filth and water leaks rotting the floor.

The investment here is nearly twice than option 1 but so is the potential profit, the problem is that for such project I will have to pull specific flood related permits and I have no experience with it so it will surely take longer and probably will eat up my potential profit.3.

In Detroit prices are a lot different but you also have a lot of turn around, but with such a low purchase price investors here can eat 2/3 months of the houses being vacant.

It's also obvious to me after I flip, but if I could buy and hold for the rental income- that'd be great to have money to eat on while in school.Thanks for the help guys. 

Rehab cost is expected to be 90K (this old home eats up the budget very fast).

Looking at your deal my fear would be your initial repair costs becoming more than you the property is worth and eating up your cash flow.