The former covers the more routine added "wear and tear" from the dog, whereas the deposit covers excessive damage.  

Generally this type of transaction is best for a sale in excess of $1 million. 

Not sure if that's true or not.From the water intrusion and the damage from moisture to the walls that was fixed, I don't see this as catering to a random whim or wish.   

@Mark C.You may not do either of the things you propose.You may not transact with your IRA or make contributions to a Roth IRA in excess of the allowable $5500 per year ($6500 if you are age 50 or older).If you have existing IRA funds, those could be setup so as to be able to invest in real estate.

@Carolyn Morales yes, The property had been vacant for many years and the city had a monthly charge for a closed account.We found it right after the sale and luckily were  reimbursed from the county from excess money after the taxes were paid.

Is there any room for it to be in bad enough shape that it could tank those estimates due to excessive rehab/repair costs?

Interesting article published today. https://www.foxbusiness.com/features/10-cities-in-...To make the list, cities had to have rates of negative equity in excess of 8.2 percent, which is the current the U.S. national average rate of homes “underwater.” combined with the city’s mortgage delinquency rate from Zillow’s February 2019 index.

That can cause moisture to build in the attic in your area.  

Of course, the eventual plan is to refinance the home as soon as possible through a traditional mortgage, to reduce the excessive amount of costs with high interest rates from hml.

But shoveling all their excess cashflow into software by hurrying to automate their first property is bad business practice.