Even a 1% difference in tax rate translates to about  7% of gross rents in this example (1% of purchase price = $300; $300 = 7% of gross rents).  

So I would expect for the seller to tell you to take a hike, and you wont have to worry about your offer.Regardless of the repairs costs, unless you have reason to expect the appraisal came to the value in error (bad comps, errors in the specifics of the property, etc), than the $340k number was never going to happen.Sounds like the property has multiple problems, and it sounds like your not an expert at spotting these and have to rely on contractors, I would recommend you run from this property.  

It might be "6 of 1, half a dozen of the other," but I recommend that the new purchase cover all financing, meaning the mortgage on that house, as well as the financing of the down payment, without having to rely on the first house to pay the debt of the second.  

The UP may be too desolate to rely on consistent tenancy. 

So instead of relying on any money for back rent I patiently waited HALF THE WINTER for a tenant.

So, even if market rates increase from the 3.5% to 4% range to say 5% to 6% that activity will not immediately translate into the fund's performance.  

I really need to be able to rely on someone to handle the day-to-day around the house.The fire department came out to the house a few weeks ago and required all the smoke detectors be replaced with combination smoke/carbon monoxide detectors.  

There is substantial risk of fraud when an investor relies solely on the unregulated statements of an unrelated third party.

You will sleep better not relying on your tenants to pay your bills.  

Nobody can beat appreciation, but you need to know timing too, if it's out of state, you don't need to watch timing that much as you'll more likely rely on cash flow.