And this is just a hair UNDER 17%.

You should use a moisture tester on all the lumber and make sure it is dry before drywalling. 

I told him to pull out everything that might have gotten wet, get everything dry (to prevent mold), and make sure it was done right. 

I think the opportunities have dried up.  

Very simple to do.1) In the hole you, spray some suspend sc insecticide inside the hole. https://www.amazon.com/Suspend-Insecticide-USA-Supply-Eradic...2) Get a beekeeper suit, just in casehttps://www.amazon.com/Professional-Ventilated-Sheepskin-Bee...3) cut open the area.4) Spray inside the entire wall the suspend SC5) Dry out and close up the wall.If this cost you $200 and some time, I'd be amazed. 

Turned out that the house had been owned by a family who lived there forever and ran a small beauty salon out of the house, so one of the bedrooms had been turned into the hair salon and the dining area turned into a foyer.

Adding rooms does create the potential for more conflict but carefully thought-out floorplans, designate wet and dry storage spaces, and provide supplies.

Break down your rehab into individual jobs, for example get a electrician for electrical work, a plumber to repipe the house, a dry wall guy to close out the walls, etc.

Are these markets dried up until the rent to price formula evens out a bit more down the line (if they ever do)?

My personal residence has a single basin sink and we use a drying rack similar to the one pictured below and never really even considered it a problem