some lenders ask you to put some capital in reserve account while some investors do that anyway, by alocating 7%-15% of gross rent towards Repairs and Miantanance. 

It had foundation problems, fire damage (completely gutted), bad neighborhood, needed to many repairs, etc...

This can include- oil changes, Maintenance, gas, repairs, parking, tolls, and depreciation.

House will rent for 1550Scenario 1: Pull 85% out, This would leave me with $8,700 cash in my pocket - Mortgage +T+I+HOA = $1,276.Scenario 2: Pull 80% out, I am left with $506 in my pocket - mortgage of $1,223The house is on the newer side so repairs should be moderate, and I plan to property manage it myself for now, but will build that into the equations since i want to eventually get out of Property management.  

Are there any major repairs that need to be done that you can think of?

@Meera Lakhavani ask your lender how sure he is the loan will close, ask your real estate broker how sure she is of the after repair value and appraised AS-IS value and ask your contractor if the 185K includes all the upgrades, finishes, etc that you have in mind.

The house is in bad shape, needing around 35-45k in repairs. 

While that might sound great it can be a nightmare if more than just a few investors in a TIC.Tons of those failed during the last downturn because when the property needed repairs, refinance, or considering a sale there was lot's of infighting and opinions of what to do.

They can just go to the Clerk of the Court office and just ask what the required legal procedures are to evict.  

One of the requirements for a multi is that every living unit must have independent utility services or at a minimum 1. legal provisions ensure and protect access to utilities for repairs, even if passing through other living spaces, 2. easements or covenants protect water connections, and the VA approves of a maintenance agreement; 3. there are separate service shut-offs for each unit.