However, putting up a fence and renting uncovered space wouldn't be a bad idea.

Also, if the question is on the application and you answer that there is no Knob & Tube, you may end up with an uncovered loss if the correct answer would have made you ineligible for the policy.

Do your own due diligence and trust the numbers that you uncover from your own research.  

At least you know you are dealing with a seller that is ready to sell.But I understand that there are sometimes properties that aren't listed accurately, and little gems can be uncovered... a popular example would be 2 bedrooms houses that have more than 2000 square feet. 

Honestly I was not willing to pass up this deal on the grounds of the seller/listing agent being untruthful because anything they could have hid from us was researched and uncovered.

I had my 3rd AC unit replaced a few months ago and while it's definitely worth it (a new 2ton roof mounted package unit will cost me about $4,200 from a local AC company and I end up paying between $700-900 in uncovered costs through the home warranty company).

You either do a full gut or a cosmetic and fix any major issues you uncover along the way. 

That is my fear, I actually need to go look at the place and do a walk-through with an inspector to uncover "the undesirables".

And a lot of times the savings from your initial cost seg study will only be a drip in the bucket compared to the savings you will reap over the life of the building through the TPR's.The question you need to ask yourself is am I looking simply for a cost seg vendor to just complete the study and give me the report or am I looking for a partner within my tax team to help uncover the maximum tax savings available to you under the current law. 

The cost to rehab: Hire an inspector for $500 who will go through the entire property and uncover any issues with the unit.