Who pays what, and how much are they going to cost you if you're on the hook for:TaxesSewer and WaterTrashHeat/UtilitiesHOACap Ex and Ops (this is generally made up from a % of the purchase price and I use $150/month as a floor for the equation)InsuranceMgmt Fee (as a %)Vacancy (as a %)

At the same time, I have to learn somehow, as I'd like to grow my rental business in the future.In the Good/Fast/Cheap equation, I don't need it Fast (not carrying a mortgage or construction loan, so taxes/insurance/lost rental income is the only downside of taking a long time), but I'd like it Good and Cheap.Am I foolish for thinking I can oversee a project of this magnitude?

You did not provide enough details to get specific answers, however, foundation issues can be tricky or easy, so the extent of the foundation issues is a large part of this equation.

@Anthony Martin - You also must prorate the gain as described above, so the two (2) year holding requirement is only part of the equation now.

After doing the 70% rule of thumb equation i came up with an offer of 424K.

Sorry, but cash flow is not a simple rent - mortgage equation.

I still run away from historic deals for the same reasons you and others have pointed out - everything costs more, which equates to a relatively low return on investment.

Assuming an extra $100 in expenses for the 2 properties, you're still getting an extra $225 in income from them which equates to $2400+ actual additional cash in your pocket each year.

The property condition will also be a factor in the equation in whether or not you can borrow for the purchase?

I plan to use any profits from the flip to add to a down payment on another buy-and-hold.Lastly, remember: there are always two sides to your income and expense equation: Your Income and Your Expenses.