The hot water heater was on it's last legs.

IF this is a buy and hold use it as is and see where it goes.If the tank 'needs' pumped,,,pump it,,,if the laterals arent draining well enough you can blast them with high pressure air and styrofoam beads and make it work like new,I would NOT call any inspectors or wake up any sleeping dogs I didnt need to. 

Depending on if I choose to rent or flip the house, the rehab could go up or down, but it is in an established & quiet neighborhood with great access to shopping, Costco, restaurants, the Air Force base.

I wouldn't call them hot markets unless you're physically here on the ground.

She's getting the lot devided so the garage will be on its own plot of land so even the zoning is up in the air for now.

I've got investors looking for multi-family from all over the state looking at Central Washington because their local markets are too hot and deals are hard to come by.  

The trouble is, it's a pretty hot market and most houses have multiple FHA bids on them.

Plan about $9K in repairs up front for new carpets or floors, paint, 6 appliances, hot water heater, plumbing leaks, and to fix whatever else was broken.Also, if you are planning FHA financing please beware that many of the foreclosures will not qualify due to disrepair.  

But I'm also coming from the perspective of a perpetually hot market where we need to be super aggressive to acquire a property.

exit from hundreds or more SFR's can be a real chore as well if your not in a uber hot market were retail sales are the norm.. much easier to sell one 500 unit apartment complex.. then 500 homes scattered around town.I see this often with folks that own a bunch of SFR's they want to sell it like its a apartment.but lets say the 200 homes are worth 100k a door that's 20 million.. a 20 mil buyer would much rather look at one asset in one place or maybe two or three other than 100's of homes..