I don't think you're providing enough information about the situation, the actual bid amounts will play into whether this is a good deal or not.

I may have overestimated the rehab, but played it safe.

It's like playing poker.  

However, I am looking to move closer in and have been hunting through LA's neighborhoods myself in trying to decide where my next play is.My thinking has been influenced by David Schumacher's book - Buy and Hold.  

This is a long term play and that's why most fail.

@Spenser Harding I went back and double checked my notes for a VA compromise sale (short sale). 88% of the appraised value is the minimum acceptable amount, so maybe they are playing hard ball, or the negotiator is inexperienced, etc.

Returns are nice when you play in the gutter, the headaches seem to balance off the returns, at least for me.   

When you stop putting in the effort the income will start to drop.Or play the lotto, that GAME might be more what you are looking for.   

The saying "fake it till you make it" has played in my head whenever starting a new endeavor.

Say you can only rent the main unit at $1,600 (up $200 from today) you’re still making a square $4,875 which makes the deal look attractive.Yes I’m playing with the numbers, but the property really is beautiful in that it is solid, low maintenance, great location, and has good appreciation potential with the neighborhood, including being next to a foreclosed house that based on the cracked foundation, we assume will be a teardown.