@Sean OTooleAs an econ major, I completely agree with you with regards to opportunity cost.

MY info says that would be a major mistake and buyers wont like it. 

Almost every major highway is under construction at the moment (I don't miss that) and traffic is always a joy to be stuck in.  

No heat/air, no water, flood/major leaking.

However, you should think twice about using those resources for major renovations.Use the forums here on BP to ask for recommendations in the markets you're interested in, both realtors and contractors.  

Yeah - the low end of that was with a local co-op bank, high with one of the majors. 

They even went so far as reducing the price 60K and selling it at 200K even and it has no major issues.

I want to know how landlords would few a foreclosure versus a short sale, versus a credit card default or major settlement on several cards.  

You'll also find that even major cities in Texas have predatory dealing ordinances with real estate, it's also addressed at the state level. 

Many banks will use a portion of your rental income as a way to qualify you if that is where you derive the majority of your income.