When I do that math on estimated rehab and ARV, the 50% of profit doesn't even equal the 20% mark up of construction costs that I should be getting paid to run my business.

If you have wood trim and floors not all neutrals look equally good.

In most cases aren't full value deposits (equal to one month's rent) going to be forfeited by the tenant anyway in order to resolve whatever repairs they are responsible for?

Or should I require him to pay the deposit and maybe give a discount on monthly rent equal to amount of work done (monthly discount applied until amount is credited).

If I have a broker representing me and we come across a seller that has does not have representation, my broker can all of a sudden change from having a responsibility to me to a responsibility equal with seller.

Location, Lender, Buyer and Seller with common interest equals a deal.  

The seller tells me that the county will require an amount equal to 1.5 times the amount of a septic system replacement to be put into escrow in order to transfer title.  

Asking price..850,000GR.....75,600...No vacancy added 10% for vacancy....75600-7560=68,040Expenses...26,879.15...not showing management....Insurance......Gas 
Took 50% of adjusted gross income 
Which equaled..34,020 The cap rate with the price of 850,000 and NOI of 48,721 = 5.7%.

High cap equals high risk....low cap equals lower risk.

You'd have to account for what a fair rent would be for your unit, or try for a proportionate percentage (e.g. if you occupy one of three equal units, I think the 1% rule would be "modified" down to .67% to reflect your own living space.