When you turn this house over, you will have to pay $3,000 to redo carpet, paint, clean, etc.

I've done a good amount of renovations: siding/soffits/fascia, gutters, replaced all concrete work, repaired and refinished porch, all baths and kitchens, refinished hardwood floors, full paint job, landscaping ,etc.I live in one unit and rent the other two, a 3br/1.5 ba for $1200 and a 1br/1ba for $700.

There's even some late investing strategies our clients use to reconvert to rental then sell later and buy passive 1031 opportunities to hold till death and the step up in basis.The key points to remember are that delay of taxes (paying homage to watching paint dry and the World Cup here) is still a very valid strategy. 

The house was completely painted with both latex and oil based paint.

Fits right in with that demographic - probably painting with a broad brush but it takes a special breed to do those jobs. 

Buying an undervalued home for me is buying a home for $65,000 and putting $10,000 worth of paint and carpet and other inexpensive updates.

Is the paint really bad?

Also bleached the less than 1sqft of surface mold and painted over it).

Wallpaper needs to be removed and needs new paint.

We had a professional lead test and it turns out that all the walls have lead paint (which is completely painted over with new paint).