Keep in mind though, assuming your numbers are accurate, a home that is that overpriced indicates either a seller or a listing agent with unreasonable beliefs or expectations.

That said, some appraisers are more strict (read: more unreasonable) and without a longer time period, will try to screw you if you try to get a new value much higher than the purchase price without doing any renovations.

But to your main question, it's not uncommon or unreasonable for a wholesaler to make $10k on a deal if the numbers are good enough.

The tricky part is that a lot of people inflate their net worth by having a slightly unreasonable expectation of what "fair market" value is for their house or other real estate assets.  

Life is too short to deal with unreasonable people. 

I think your tenant is being unreasonable.

If your price is unreasonable, you'll know right away.

From what I could tell after spending time on forums and VRBO-type sites, it doesn't seem unreasonable to assume we could charge $120 a night (more during peak season) and keep a 60% occupancy rate (year round average).

Is it unreasonable for me to expect them to pay for the treatment?

The case that the tenant was unreasonably and unlawfully damaged is stupid easy to prove, and is preponderance of the evidence standard.