He said we might need to replace the plumbing but that would not cost so much as there is very little plumbing.

Different vintages are know for various problems ( asbestos, knob and tube wiring, lead based paint, polypipe, galvanized plumbing, etc.)Does landlord pay water or other utilities ??

Its a good learning start for you and even if you pass it up you will know so much more for the next one,   Its an old house so you need information on what they have done with the electric plumbing heat/ roof etc.You are on the right track.  

This is our first time doing an FHA 203K we are not doing any updates to the kitchen nor the bathroom just making sure the house is functioning running new electrical wire, repairing plumbing, back stairs, doors, few windows, painting, roofs, garage doors, finishing wood floors, and cleaning.  

I know you are speaking of a SFH, but I refuse to purchase any multi-family dwelling if there is mold requiring demolition (dry wall, plumbing). 

The larger unit is recently renovated but will require some work to be contracted out (largest thing being dormer out the attic bathroom to make it a true 2nd bath, all the plumbing / tub / toilet is already in place but the ceiling is so low due to the angle of the roof that is it silly) and some HVAC work needs to be done (adding central air and replace one of the furnaces) - we are guesstimating $50k up front for all the contracted work which we plan to finance.We are doing 20% conventional 30 year mortgage, purchase price $315,000, monthly payments will be $1750 a month.  

This way I'd essentially have no money down and extra cash on hand to fix up the basement (plumbing issue, 8k-10k, 4 bidders so far).

Anyone that would, may subject themselves to a litany of regulations regarding ability to pay, benefit to borrower, etc..

To be a Realtor comes with alot of expense just to start up and then there's those pesky rules and regulations that you have to follow legally.As a wholesaler you bring together a motivated seller and cash buyer, buyer pays your fee and on to the next deal....no brainer to me plus I make my own hours and I'm my own boss that right there is better than money :)

HOA's are no different than single family homes that could need a roof replacement, an unknow code violation due to structural/electrical/plumbing issues or a drug dealer that moves accross the street after you acquire the property.