I would recommend you add your down payment, the cost of any materials that will be installed in the home and he cost to demolish and remove the remnants of the home if it is destroyed to the loan amount.

That is because your cost to repair and deal with problems will destroy your cash flow.

If you go to court the tenant might destroy the place.  

Coming from a background in finance, I know that I will, one way or another, be able to find either a single partner, or group of investors who aren't afraid to pull the trigger, and who are interested in actually developing land, not destroying it, and creating beautiful properties to be sold along with beautiful margins.I'm also curious to know if any of you have tackled projects similar to this (I know I haven't given out the secret ingredient), just speaking of land acquisition / development / selling properties, repeat.Thoughts?

I'm interested in success in the long run, not leveraging every last penny until I have a teetering house of cards that can be destroyed by the whim of the market. 

(I know that a water leak destroyed one of the bathrooms while it was vacant.) 

Basically, if someone destroys your property, you are S.O.L.

I have too many horror stories I could tell but the main point is that when a PM is involved communication must flow in one direction; throwing the owner in the mix destroys that and opens both owner and PM to significant liability.

If he doesn't want to sign early cancellation, I'll hand over my 30 day termination notice.Otherwise I'll get in touch with his lawyer and do the same.Bad timing thing is that I have a potential lead on someone else interested in a shorter term lease that might be perfect for that unit, which would at least keep the cash flowing on that address while I work on the rehab of the other unit in that house for my BRRRR strategy here.However this plays out, as long as he doesn't manage to tie the thing up and get in the unit after he gets out only to destroy it, it's a great learning experience.  

I've read too many horror stories on the forums about "professional renters"  who have figured out the system and manipulate it for months of free rent and destroy your home in the process.