It's not like HGTV when a scene cuts and now the floors, and plumbing are magically finished.

Many sellers are having to make huge price cuts to sell flips and/or new construction, so be careful there.With your buying criteria, Daytona area is still a great market with strong numbers. 

However it would not be something clear-cut, so it comes with risks, restrictions, and it certainly requires a much deeper conversation than we can entertain on this forum. 

Something like damage to flooring might have been noted then.As for useful life (this is term used in California law), your PM is correct in taking the useful life of component into consideration.

All commercial mortgages have DSCR as a primary component, anything >4 units is commercial, and no one calculates personal DTI on a commercial mortgage (so calling it a "DSCR loan" is a misnomer, if I had a wonky commercial mortgage that calculated DTI and would go for an owner occ SFR, I wouldn't call it a "DTI loan," I would call it a "home loan").

Almost no body told us about Root barrier, which are simple digging  about 2-3 into the ground, near your foundation to cut invasive  tree roots. 

We can do some of the legwork ourselves to cut cost - we have flipped houses and built two new homes before but we had the misfortune of starting in 2005 and ending very abruptly in 2008. 

Or do we just cut our losses and keep her deposit?

I’m not trying to cut costs, as we all know how important this can be.

Cutting your losses even if the 1:1 is a cheaper solution today is missing the forest for the trees.