The house is in good condition but there was a utility disconnect tag on the front door.  

Second question...did you at least ask them what condition they believed the interior & exterior were in, after they told you what they thought it was worth? 

I care about my tenants well being, their right to privacy, the condition of my property, and my business. 

Typically, those are in better condition.

I'm sure there are some easier and different ways you can get started, this sounds a little suspicious to me at first glance and as mentioned the numbers do seem a bit slim.Usually properties purchased at a sheriff sale aren't in the best condition, I wonder if there might be more rehab to do than what is stated.

I am trying to avoid hard money as the project is estimated to take up to a year due to weather conditions, area restrictions etc. 

Here's what I found after a little research:Duplex4 bed/1.5 bathComps: $160k - $285k (at least what I can tell from zillow/trulia)Houses on the same street (in much nicer condition) are estimated on homes.com for $236k-$436k.

@Shawn ConnorsA perfect lease option house is-Good safe neighborhood - quiet street-good condition-payment PITI = payment rentIs the listing still in effect? 

You should be able to net $10k with 40 units without working more than 10hrs/wk.My experience has been that every 10 units, if in decent areas and condition, require about 2hrs/wk worth of work.You should buy the first property and see how much time you are spending there every week.

It really depends on what kinds of property you are looking for, what kind of condition and what kinds of % returns you want.