Generally a higher cap rate indicates a lower credit tenant which indicates a higher risk to the property owner. a 10 cap is a great deal until the tenant goes out of business and leaves you with a Negative 10 cap as you are on the hook for all of the expenses associated with ownership.You should consider creditworthiness of the tenant first and foremost. 

How do you minimize future problems?

Construction/rehabilitation timelines rarely go as initially indicated. 

I always tell them: I teach you to be the founder and person in charge who pays those you hire to provide what they promised at high quality with minimal effort.You can be that founder anywhere in the world that has an internet connection and when Starlink is fully build out, literally anywhere in the world.Happy to tell you in a chat how I do that

Screening for financial stability and rental history can indicate whether a tenant is likely to fulfill lease obligations responsibly.- Legal Compliance: Tenant screening helps property owners comply with fair housing laws and regulations.

Details:Under Contract: 175kAttempting to Get: 200kARV: 290k ARV being 290k indicates that after rehab the property is worth 290k.

I think the first question is do you want to be a rental property investor or are you just figuring how to minimize your loss?

Begin with smaller flips, using other investors as your bank, which will minimize your risk.

My preliminary research indicates that this might be possible (without committing fraud!)

Additionally, I have a "Notice to Vacate" section in my non-standard rental provisions indicating that tenant and landlord must provide a 2 full calendar month notice to vacate.