I recently became aware of a very cheap property (roughly half of after repair value) and upon looking at it in person I found out why it was so cheap: there is severe cigarette damage throughout the 1st floor (basement less so, but not entirely without damage); there is visible dripping tar on every wall and the smell is awful. I am considering buying the property in cash then hiring Servpro to fix the cigarette damage. After that, I'd paint and put a new kitchen in (likely do these myself, which I have done before). I have arranged for Servpro to take a look at the property in person to give me a quote for this job. Based on what my real estate agent thinks that this quote will be, roughly, and the after repair value, it looks like I could buy this property in cash, spend a month or two fixing the damage, and then put a mortgage for roughly 1.6x what I paid for it and thus have a cash flowing property at a few hundred dollars per month and a little more money in my bank account ready for a down payment on the next deal. There's currently a tenant in the house (who I presume caused the smoke damage), but the seller promises that this tenant will be gone before closing. I would refuse to close if this turned out to not be the case. This house is in a neighborhood that will not significantly appreciate according to my real estate agent.

When I think about this, I don't see many downsides, so it seems a little too good to be true. So, I'd like to discuss it — am I missing some downsides here? Does this sound like a good deal?