Monthly payment $1256total note collection remaining $139,416.

I had the impression that you were just scouring the map on Zillow, saw homes for $65k, and thought it was an out of state market worth pursuing. 

We will lose out on $100k but get our cash out and the new investor will clear $100k by sitting on a deal for a year (while collecting rents).Does this seem feasible or something that would be attractive to an investor?

The question is: Do I let her rent longer, continuing to collect, then renovate before the next renters' cycle (around March/April or later)?

If tenants are moving out right after closing, do double check the leases clearly show the security deposit they paid the seller and you collect that amount at closing from the seller (credit to you) so you have those funds to then return to the tenants when they vacant under your ownership. 

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

For market pricing, I collect LTR data from BP rent calculator and multiply by 1.5x.

IA will be building, collecting rent & and taking us on virtual or real vacation. 

For you to be in the game 2 years Im impressed and see you are headed to much bigger things.

It was obvious he valued the upfront fee more than the potential of a real partnership where we could collectively earn substantial profits (hundreds of thousands of dollars vs 10k) in a matter of weeks.