And that's after paying to replace the existing system with electric baseboard.

We offer 100% financing on both purchase and rehab (loan size up to 75% ARV) but only in 10 states.So if the location and the numbers are right, you can be as low as 0% down.Yes, this kind of leverage does exist on the short-term purchase and rehab loan, and for reasonable terms.

Since you decided to change the contract by asking for a concession (which invalidates the existing contract), you will not be able to sue for specific performance. 

We have an existing mortgage (backed by these 2 lots and 2 others) and given the increase in appraised value there is no need to pay anything back to the lender when selling the lot.

On the repairs - I re-read your original post, and you did seem to mention that you have a property manager - is that accurate? 

(No mortgage on any).the cash flow is a total of $3,100 a monthDo portfolio loans exist for these kind of situations?

Why does PM start promoting the property only after existing tenant moved out and property fixed (small repairs)?

I'm not sure if they still have that in this current rate environment but they do exist. 

Instead of buying existing properties and rehabbing them, the idea is to partner with a builder who constructs new rental properties, then refinance and rent them out. 

Don't want to pay tax on selling the rentals I unfortunately don't think they actually want to utilize the 121 to sell their existing primary and then potentially buy another one-it sounds like the goal is to ultimately continue owing that initial home which I think makes this whole plan 5x more likely to be torn apart under audit because they're trying to end up with the same property they started with.