The analysis that I do is kind of backwards to what you are looking for, but you could back into your numbers easily enough.

I could choose to eat out wherever, with no groupons or deals and pay full market price - easily blowing $150 in a night.

This is an out of state property, so I can't easily go and check what is going on.  

BP for the win!

A huge potential problem that can easily be avoided

There are Lenders who will fund up to 100% of the Rehab amount (depending on the as-is value of the property), but for 100% financing of the entire project, I'm not too sure if that will be an easily achievable option. 

Here are the terms : Transaction Details: Buyer will not be charged a Buyer's Premium for this propertyIf you are the Winning Bidder, an Earnest Money Deposit of 5% of the total purchase price or $2,500 (whichever is greater) is required.Buyer may receive a Special Warranty Deed or equivalent if Buyer is able to purchase title insurance without delaying the closing (title fees typically cost between $500 and $1500 and are based on the purchase price of the property).

You know what I do when the market gets to hot, go ride my bicycle a bunch, and hopefully win a few championships.. really. 

Not to answer for James, but I think that's very reasonable - the life of a good furnace can easily be 25-30 years or more (I'm at 24 on my own furnace at home), and adding the central air will help him attract tenants more easily.

I think it would be great to eventually turn this into a full-time gig, but slow and steady wins the race!