It would almost certainly be overkill to have a cost segregation done, but the exercise could be helpful and might be a good educational experience for understanding how properties break down. 

It certainly  always is advisable to exercise basic safety precautions, such as keep windows locked up at night  and when you leave the house, getting dead-bolts installed and using them, etc.  

I'm going to run the numbers again but for a first purchase, this might have just been an exercise for practice. 

It's a good exercise because I catch some of the things I missed on the first walk through.

When I go to exercise the option after the alotted time period, do I seek fixed rate bank financing on the appraised amount, which the bank will lend 70% on, and then use that to pay off option and keep any remaining money so that it effectively becomes no money down other than the option fee and any attorney fees needed to draw up the MLO?

So I read over your post and I feel like there are quite a few options you can exercise.

Looking at LP+Promote level performance indicators might be an interesting exercise, but it doesn't produce much value to me because I'm not doing it to compare one investment option versus another, I'd be doing it just to see how high my IRR or multiple is. 

The Option Contract doesn't conflict with the Refi mortgage.However, when (if) the Option is exercised, a Purchase Contract is initiated, and the mortgage needed for that contract takes out the Refi when paid.

I would exercise that strategy rather than pulling money out of your accounts. 

And then there's a separate document (which could have been made part of the lease) that is the option to purchase, which is another matter entirely and becomes null and void if they don't exercise it in accordance with the terms to complete the purchase.Now this does depend on the property state laws as well as what your lease says and what the option contract says.In a standard landlord / tenant relationship, if they improve the property they did so at their own expense with no expectation of being reimbursed... but again, what do your documents say to this?