If you violate this rule, especially in the city, prepare to be sitting at home wondering if your money is being stolen. 

Question 1: Does $4698 for materials and labor to prepare my house for a hot tub seem in line?

It sounds cheesy, but the best way to prepare is to work with a friend or two and role-play.

And am I prepared to handle that if it does?"

And I’ll let you in on my experience of 40 plus years in real estate, and having personally met many of he older time gurus; take away the slick presentation (prepared by a marketing firm in either Las Vegas, Nevada, or in Provo, Utah), the “glamour” shot appearance makeover, the unsubstantiated resume and personal history, and the buzz words and motivational bs, and what you’re left with is most times a salesman/marketer and NOT someone who has had much if any success investing in real property.   

Therefore, investors must be prepared to hold their Notes to maturity

Are you prepared for that?

Quote from @Juan Hernandez: I hope you are prepared.

If you plan on being a buy and hold investor then you should be prepared to handle capex events on all of your properties.

Second, if this relative has any other close family, prepare to be accused of "taking advantage of sweet old Aunt Sally," if not now, then a few years down the road.