I've heard of this causing leaks in the roof if not done properly.  

Housing in Colorado is through the roof, hence why I am looking out of state.

The property tax is pretty steep, $3970.

It's always "cosmetic" plus new doors or "cosmetic" plus appliances, roof & furnace, etc.We use a simple, manual spreadsheet with ball park pricing for each of the rehab disciplines.  

The house was listed for $99,900, but in need of repairs and updating and had a pigeon infestation in the roof.

The property is in decent shape structurally, I will be putting another layer of shingles over the roof (one layer currently about to end of life span), Exterior needs a fresh coat of paint also.

It's well worth taking a deep look at the roof, furnaces/ACs, Electrical, etc and put together a quick spreadsheet of when they realistically would need replaced along with a cost for that replacement.

(Friend was tied up in FHA deal for 2 months before it died due to an outrageous home inspection report - 60 year old home was priced 40k below market, buyer gets out after cold feet and asking for the sellers to replace roof, hvac, hot water heater, all kitchen appliances when all in working condition / passed FHA.)

Is the roof leaking or something from above the location? 

Go on zillow and see how many condos there are,  Also check the HOA documents to see how much reserves they have for new roofs, common areas, how old is the pool, etc.