Just remember, in this town, in need of renovation is usually one termite away from dust. And most properties are Realtor owned, as in 2003-5/6 they were all quite busy buying everything before it came on the market and then reselling to other realtors, which means "owner is a licensed realtor" also means "owner bought a dozen houses and is dying to sell".
Key West is a great place to live, and I've been here long enough to see 800sq ft cigar homes go from $250K to $650K and back down to $250K, mostly thanks to realtor greed.
Hey, check out 517Chapman Lane. It's classic conch, great location in Bahama Village (quiet street, two blocks from entrance to Key West best beach Ft ZacharyTaylor) and does have potential with a fair sized backyard. House has new paint and old old dry rot and termites. Under the pink skin is a major fixer, but a cute place.
Good luck. - AB