You have to find out what the sellers currency is in negotiations to make the deal work for them.If it is not something you are willing to do maybe propose a different scenario the seller hasn't thought of or considered.

The contractor's proposals are either within that budget or not.  

He's got some additional costs for construction built into his loan, proposed plan is to do a wrap around mortgage on the property.

What investing strategies do you propose to safeguard against a bubble pop without totally pulling out of the market?

I'd like to propose a counter-point to some of the arguments here.

At the requested loan amount we’re raising the cap rate 130bps and still supporting the proposed refinance value of $1.335MM which supports the loan amount of $1MM at 75%.

Regarding the proposed language you provided above, take whatever book, etc. you got this from and toss it as it's nothing but a problem looking for a place to happen.

Also, some banks will run a portion of proposed short sales thru auction.com looking to "verify" the price.  

Newbie to investing and I'm working with a hard money lender who will provide 90% of rehab costs, but I need to submit a line item job proposal.

The lesson learned is that its better to have a unit that is in need of repair rather than trying to repair it so it can be rented immediately upon close.I am trying for an escrow hold until the repairs are completed and also argued these are not structural repairs but I am doubtful these proposals will be acceptable.