It's going to be very hard to get strong positive cash flow on properties in that area unless you're getting them at a substantial discount off market.

It sounds like he got a job cancelled and is fitting you in to a cancelled slot at a discount.

There is some discount on them the second time but not a lot.  

In that model you are benefited by buying existing at a discount.

Seller agrees to lower price (I would need a fairly significant discount to make it worth the out of pocket expense and risk that repair is more expensive than planned)3.

Kurt,Since you are already into S&B, you can very easily think of the value of real estate as the sum of the discounted cash flows at your reinvestment rate (IRR/MIRR).

If I run the numbers at purchasing the property at a 7% discount off asking the cash flow goes to 1171 and the CoCROI goes to 16.92%.

We typically beat the pricing off of the big box stores by 40-50%.I am in the process of putting together a biggerpockets discount.

The difficult thing is finding people willing to give you the discount that you need if the property is in a market that doesn't necessarily support it. 

For flips you would need to minus your profit.I would get your ducks in a row for each property, present them individually with individual offers, then as a package offer with a discount.