The more they have to loose, the greater the likely-hood they will work to continue to keep the home.

The insurance is higher along the coastal areas because of potential hurricanes but not bad the further north you go.  

As long as we keep any of the protected classes out of the discussion, is it ok?

Are you looking at the maintenance/repair costs of the homes once in place, W/S/G costs. septic expense if applicable? 

He's changing the terms of the agreement, and you can choose to accept it or reject it.I don't think it's fair to pass this cost onto the tenant just because you are unwilling to stand up to the contractor.

I'm a dry sponge trying to soak up all the knowledge.

From the sound of it, the cheap debt is not really a motivator at all for you.

AT MOST you rent it out for 2 years and then sell it but honestly you’re probably better off just selling it.Assuming zero vacancy and zero capex you’re going to make about $12k/yr.

The term "reasonable" is going to be redefined.

@Jim VasicaThis is the million-dollar question!