Simply wanting to confirm when implementing this process, we will incur the expenses related to cost of closing 2 times ( once for the cash purchase and a second time for the cash out refinance) correct? 

Implementing you military training and experience in your real estate business.4.

Accordingly, FinCEN promulgated the aforementioned, effective compliance date for SAR filing in order to allow time for the nonbank industry to implement programs and systems and for FinCEN to implement the new filing system using a uniform SAR.In addition, FinCEN intends to phase out the manual filing of paper SAR forms.

What other creative ideas are wholesalers implementing?

Whatever it is you fine folks tried to implement it is backfiring.

The fastest growing startup ever (Zenefits) just fired its CEO, implemented a hiring freeze, and was written down by Fidelity 50%.

My advice may be too late for you to implement, but I would highly suggest offering them Cash for Keys.

Sounds to me like you need to implement a new policy- rental inspection every 6 months.  

your first choice which is referred to as "house hacking" is a very popular concept alot of investors have started off doing and/or implement today.

As @Cave Johnson mentioned, an agreed upon cost-plus for extras is viable and oft implemented especially in commercial work.Regarding pointing out problems or work needed... if you're not qualified to be walking the project yourself on a regular basis, hire someone who is (e.g., owner's rep).