There's property tax, insurance, trash, water, sewer, property maintenance, state transfer tax on both the buy and sell.

With as hot as the market has been recently, many folks who bought in 08 are realizing that they are no longer under water.

Is it illegal to have one water meter in a duplex property when renting both sides out?

Combine that with the rusted out gutters leaking water on there and the California sunshine and I bet you dollars for doughnuts that the siding will be pretty rotted in places.

I am also assuming that the utilities they are speaking of is water/sewer.  

The investors we support typically are buying 3/2 or 2/2 block homes with no pool (for liability reasons).These are HUD houses, and usually only need a light to medium rehab.In the area you described, the rental market is strong, just make sure you have a good screening process.

In addition to the price ask how many bedrooms, bathrooms, basement, attic, pool, deck, size, rent (if it is multifamily), location (how close to beach, transportation, job), updated or outdated appliances or cabinets etc the house has. 

Hopefully those discussions continue to spread, reduces the buying pool in Houston, which result in prices getting closer to the range of reason. 

It needs 50K in paint, central AC, pool drain, clean and possibly re surface.

Having to hold onto the house and pay those carrying costs, for longer, because you didn't study up on the FHA Flip Rule beforehand, and/or estimating the lower sales price because your pool of potential end-buyers is now significantly reduced once FHA buyers have been cut out.