That's way too tight.

The issue is that most sellers have stable cheap financing and are holding tight for now.

If both are not met, then sit tight

Again, there may be something in TX law/practice that explains this - hang tight and see what he says.

I am in a 2200 SF house on approx. 0.11 acres and it's tight, currently non-conforming to zoning but grandfathered in.

Maybe he's tight on money and spent your deposit, maybe he can't find guys or maybe he wanted to take advantage of you from the start.

It puts in a better position for interviewing PMs, you know if you have any deadlines to meet. 

If this process is not completed by the deadline, you will be at risk of losing the tax-qualified status of your qualified plan.

Even if this was not the case and the wages actually had a tight correlation to the RE prices, the value add would be associated with the property value and would be equivalent in terms of the labor costs (not reality but even if true because of the fixed material costs the return on rehab budget would be greatest in higher priced markets).This poses the question why are you looking OOS? 

The market in Viera is so tight that, after 50% appreciation in the past two years, most sellers (even motivated ones) are primed to ask for more than the market value of their home.