Where do you get the $20k estimate? I’ve just had quotes from 3 different contractors to redo a bathroom which isn’t nearly as trashed as those, and the quotes were in the $10k range per bathroom (including basic tiles, countertops, etc). I’d say $20k just for the bathrooms. Then you have the kitchen, which will be vital for the picky renter. Then again, a picky renter might not be renting in this area. Anyhow, the quotes I got were for superficial things, not plumbing or wiring or drywall or other, like this unit surely needs. So I’d say $50k+ to fix it up. You can always do the work yourself (I’ve been doing my own bathrooms, it’s coming out great) for much cheaper but have to invest a lot of time.
You also have closing costs to think about, is that part of your $150k estimate? I see you’re already thinking about the special assessment, this is good. If there are a lot of vacancies (you mentioned REOs) then there is a good chance you will be assessed or just plain raise the HOA to cover the lack of HOA dues paid by those vacancies.
Heaven forbid you should end up with a disgruntled renter. I would aim for an engineer or other professional to rent your unit, and be picky about it. If you fix the place up nice and present it well, and are thorough in choosing your tenant, you can break even.
That being said, you can also break even if you wait 5 years. Don’t worry about rates going up, because this is a cash-only sale so rates do not affect you other than to lower the sales price! The ONLY reason I’d say “buy now” is if you were affected by interest rates but even that is debatable.
