With respect to the rehab it really needs 2K as new flooring(uneven) New linoleum in bath/kitchen, new bath fitter, minor bathroom plumbing, new paint, two new windows, new dry wall and a rubber membrane on the upstairs porch are required.

However, they did not sit DIRECTLY on the roof, instead they had a heavy, rubberized mat that was placed on the roof first, to protect the actual roof membrane.

Flat Membrane and rock versus metal with slow pitch.    

I consider myself a savvy apartment investor and I have zero problems with flat roofs as long as it's a newish TPO or rubber membrane roof and installed properly.

Or cutting open a tile shower, because you have to show a water membrane was installed...It's an inconvinience for the contractor, especially for those who don't have a project schedule and are just "winging it".

In my property in Fort Worth, the membrane recently failed on a shower (roughly 4x4).

.- Sitting water on the roof due to incorrect grading of roof membrane.

She divulged this info at our monthly poker game... it just fell in my lap.Data:1700sf3 Bedroom, 1 & 1/2 Baths, w/  bonus office space1 car garage (typical for neighborhood)Comparable properties in neighborhood sell between $150-160kEstimated damage (moisture and general damage) with a contractor at $45k (yeah, nothing to sneeze at; new roof membrane, hvac and ducts (ducts on roof on old NM house), gyp bd work, mold abatement, all new flooring, interior doors, etc.New work would include redoing the kitchen (simple and small, maybe $10k)Upgrade electrical service so we can upgrade the AC ($1.5k)Spruce up landscaping front and back $5kSmall contingency of $4.5k for misc.I feel pretty good about $65k as a healthy flip budgetSo, she owes $98,000We think it only makes sense to go into this if we can get it for $60,000 max (begin negotiations at $50,000).Purchase + flip = $125,000Potential sale on low side of $150,000Potential Profit on low side: $25,000 - carrying costsSo, the real meat of the question (other than feedback on my flip numbers) is what to do about getting the property for its current worth.

If you wanted to tile the floor, you can get a trowel-on "membrane" called "red guard" at the depot - it'll block moisture & prevent cracks in your new tile..

This would include waterproofing over top of the existing slab, roll the membrane up the wall, terminate with batten bar, sealant, and butyl tape.