I wish you the best.You must have overlooked the part where I indicated I have been investing in small towns for the last 25 years .  

While the 100% point is Ideal(indicating Reserve cash is equal to the value of deterioration), a ReserveFund in the 70% -130% range is considered strong (low risk of specialassessment).

It is 5% per month-there is some controversy about that owing to the fact that it comes out to 60% annually, but I had a hard money loan (owner occupied ) out at 15%, contract written by a Georgia real estate attorney, so I consider that a good indication that I was legal!

. - If you know your numbers Key Performance Indicators KPI's that will give you an insight into the business.

Does this indicate we are close to closing?

It should give you an idea.You indicate that you would do a bunch of work if you try to flip it.  

One of the best indicators is Jobs.

Instead, keep the funds from her security deposit and indicate such when you provide the written deduction statement upon return of any remaining funds.

I've seen other appraisals where a short sale was used as a comp, and it was indicated that it was a short sale, not an arms length transaction.  

My initial numbers indicate it is NOT a good deal for the existing use but with the value added building out the 2 other units it starts to look pretty good (negotiating point?).