It is a strong house with lots of potential, and good bones.

@Patrick Thomas Dickinson the simple (and only) answer is to buy as many doors as possible in the most stable and growing market you can find...this would take on the form of a small multifamily property...probably in the 8-12 unit range within 20-minutes of a major metro city....you can find this in Columbus, Cleveland, Cincinnati, Kansas City, Raleigh-Durham, Nashville, Indianapolis, and other comparable cities...they key is finding the property...C-class value add with a strong property manager and you're off to the races...5-year hold with improvements made, operating expenses lowered, and income driven higher means your valuation will come back with enough equity to pull and repeat the process.

You and your friend's borrowing power is quite strong based on your combined incomes.

@Ashish DivayI don't think this is that strong of a deal to drop $90K into. 

It seems like the seasoning time before refinancing would be a pretty strong governor on the velocity of your money.

This makes your offer as strong as possible without putting yourself in a position to lose your earnest money. 

I know the cap rate and cash-on-cash return can be very strong in tougher neighborhoods so while numbers are important, I'm looking to avoid headaches too.

I strongly suggest you focus on solving granular problems at the consumer level and develop your expert chops working tax defaulted and pre-probates.

(some of this was HOA dues, property taxes, so not closing fees per say) Needed *nothing* but $100 worth of L.E.D lights.Property Manager advertised the rental for 2 weeks - we got less applicants then anticipated buy 2 were strong.  

I have gained a strong sense of what it means to be a landlord and how to provide solid customer service to my tenants through self management.