I got building permits for one of the other houses and it wasn't a problem, but I get the feeling that extra kitchens raise eyebrows. 

By making small changes to your daily routine, you will see positive impacts on your overall productivity.

I also would not be interested in investing so much money in an area that is a gentrification play, $150k for a lot is very high in my market, and we routinely have house values in the $150-$200/ft2 range. 

Even if all of this is found to be unfeasible, I think it would be worth creating a property management app that gave points to tenants for completing checklists of routine home maintenance in exchange for points, like you mentioned.

I represent a lot of sellers, and when dealing with FHA buyers, we routinely accept $5,000. 

I know HML who do this routinely though.. it defiantly happens I would never do it for all the reasons you mention above its JUST NOT RIGHT

We routinely work with and share best practices with other turnkey companies.While there are many bad actors within the industry as there are in any industry, please be mindful as you post not to insinuate that all turnkey companies operate the same. 

@William Robinson I would recommend running the numbers with CapEx, vacancy, and routine repairs all around the 5-7% mark.

No particular routine.... 

We routinely rehab houses built in the 70's and 80's and with the Houston soil [high clay content] foundation repair is common.