I'd sell through Redfin at 1% seller's agent fee because we bought with Redfin last fall, so I estimate 6% closing costs (not including holding costs and just need to touch up paint in some areas, but have new flooring, new roof, and recently upgraded electrical).  

If I keep it after I move out, I'm thinking I can cashflow 300-400 per month (~$1500 estimated rent) .

I am fairly confident I can rent this out on AirBnb for around $120/night on weekends during warm months and $80/night midweek and get a fairly decent income from it - I'd estimate conservatively being able to net $1,500/month on average from May - September and $800/month October through April (would love to find monthly tenants, but acknowledge that won't be at 100% capacity during off months).I put in an offer for $40k, which is what I feel like the house is worth in its condition and location - there are a lot of houses in similar condition but with more square footage (this guy is just 650 sq ft) that have sold in the $20k-60k range in the last year.

Did you estimate low?

You'll need to estimate rehab in order to make an offer.

I am sure you have already done this but, my first step would be to look up the property on Zillow, Redfin and Realtor.com to get an estimate of the value.You want to get a thorough CMA or BPO to give you the as is value, the after repair value and the market rents.

Additionally, you're probably trying to be conservative in your estimates but why budget for a property manager?

If you want a rough estimate do the following: Count the number of beams that you think are affected and get the pricing for those joists, get the pricing for the joist hangers  and then replacement of drywall and electrical. 

I did start a spread sheet to track where I've sent letters, how much I've offered and pulled some data from Zillow and Redfine so when I do get a deal I can see how valid their estimates are.

I am thinking of getting a few estimates though as this current lender is charging a 3500 origination fee and haven’t seen the rate yet.