I probably would not use a back of the napkin approach, but hey, it works for some.

They approached us about wanting the property because the father had recently passed.

Overall, Dave E's approach is the safest bet. 

So I will start to narrow my search as my time horizon approaches.

My question is, how do you approach deal analysis?

@Lamont Marable check your local building and fire codes...putting living space below grade carries a lot of life-safety requirements and needs to be permitted...worst case...if there is a fire and tenants cannot escape...and you knowingly put living space below grade without the required safeguards in place...RE investing career over...Just do it right if you venture down that path...hiring an architect is always the best approach to something like thisBest of luck

Seems like you took an honest, considerate approach.

@Brian Nally I like that approach!

I would recommend getting the basics of the basics on the process before approaching a mentor, save them for the advanced stuff :) This being said, you shouldn't have a hard time picking this up if you know how to manage a project/crew.- find a home that needs repair, preferably off market so you don't compete with retail buyers.- walk the property with a contractor or specialty contractor(s) (electrician, plumber depending on the issues) to get an estimate(s) of the rehab.  

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