We are always concerned with ‘risk adjusted’ return, rather than pure LOI.  

The only adjustments I made were adding a couple additional rows of data at the very bottom of each page to track what I paid in principal each month, and what my net cash flow after that was.

Adjust as fits you.  

I am definitely not pro adjustable rate interest financing.A newbie investor may not see very much flexibility in some lenders,  like someone who has a larger portfolio might be able to accomplish.The reason I mentioned both together is the lender is basically a partner in the deal- a senior partner in a way.

If it were sold through normal real estate brokerage firms, we would have to pay 6% commission, therefore I deducted 6% from the appraised value to arrive at an adjusted value  of $436,160.   

You can't speak to lender or adjuster. 

He is distressed and will sell at a discount in exchange for speed.

Your current accountant should have the exact number that is your adjusted cost basis of the old property at their fingertips. 

Your gain on the rental property will beSales price less sales expenses less adjusted basis.Adjusted basis is purchase price plus improvements less accumulated depreciation.Best of luck.

Where high speed internet exists, is now a viable living potential, and that's a LOT of places. before, there was a sizable cost to where one geographically located.