It is about 2 1/2 hours from Manchester, nh.We made it through inspection, it is a 100 year old house and needs a roof before the winter, I am figuring it should be about 15kish, but haven't gotten quotes.Putting 3.5% down with an FHA loan the p&i +mortgage insurance are $1200 a month taxes and insurance put it at about $1700, then $400 for maintenance/capex, and $100 for water/sewer and house electric, 8% $244 for vacancy.Current income is $3050/month, after calculating for maintenance, vacancy, capex I figure we should cash flow around $600/month.

I drove by the property, it's on a busy street, it has no garage, but the roof looks good and the siding looks good.What do I do? 

@Sundiata JacksonYou are going to need to save at least $1800 ($150/mont) a year just to deal with the eventual roof replacement, water heater repairs and furnace maintenance.  

A typical basic new build home is around $110/s.f and you are not building a roof or foundations, so you should be in range, depending on the specifics of your home.One question is if your existing heating and cooling systems are capable of handling the increase load, or if you need to do a dedicated unit in the attic for this room.

Does it need a new roof? 

At least with commercial (5+ units) you have shared roofs, can market a little easier (create a "wait list"), less exterior maintenance per unit, etc.

Purchased the house for $215,000 and invested about $25,000 for a new roof and other repairs and now it is valued at around $315,000.  

Have owned it for 6 years and remodeled 5 of the units, new roof, full occupancy, in nice area - but just getting tired of being a landlord as my kids get older and require more attention.

It was an area hit harder by the recession, home prices are still much more reasonable, and development in the area is through the roof.

While you are getting that piece of the roof repaired make sure nothing is loose and ready to fall and move on with your life.I would say to call your insurance to be certain you are okay in their minds, then rest easy knowing you are not at fault for problems other people have that are not caused by you.