My career is inherently a career of repeat conversations as I do the same transactions and processes over and over but this one always comes back and I felt like it was a worthwhile post to help clear the air for both lenders and clients alike :) 

Faith in their ability to create an air tight title policy has him geniunely concerned and so we move on. 

Perhaps, your PMC needs a better lease or an addendum to cover issues like this.PMC should send a warning letter that clearly outlines repurcussions of what will happen if the tenant doens't comply.YOU must be prepared for the tenant not paying, requiring eviction and any potential retaliation damage to the property.

He lives a standard young professional life, so no damage or issues have come up in the past 3 years that could break any lease terms. 

The roof rafters are falling due to water damage.

I’m active duty Air Force (for less than six months) before retiring after 30 years.

(biggerpockets.com)When assets are damaged: How a cost seg study helps if an asset gets damaged!

But option A seems dangerous to property as it seems shifts the ground damaging the foundation and building as mentioned like below>>Designed to prevent the ground from shifting.From the nearest wall of the building this retention wall is at about 15 feet away.At one point i thought of putting some gravel for better water passage but dropped that idea as it cost money and becomes more harder to maintain by tenant or me in futurePlease advise

Like once we found that a tenant moved a gutter downspout, eroded the soil under heat pump pad and caving in enough to shortly damage the heat pump.

Ex (random numbers pulled out of thin air)$100k purchase $160k ARV$30k reno but $20k at cost$15k holding costsTotal Cost:$145k cost or $135k with contractorWith the contractor at cost, I have an extra $10k of margin where I don't lose money, but obviously not ideal for the contractor since they would make less.I think a good way to price it would be the equity would equal your profit if you did a fee construction at slightly below the projected ARV, and slightly below the projected hold time.