More likely we would have had higher holding costs for holding it while it was on the market and then under contract until it closed.My portion of the profit when split with my partner = $12,406.50Lease OptionPurchase price $72,150 (includes closing costs)Rehab $40,353Holding costs $2,184AVR based on appraisal $150,000Option price $159,900 for 5-year optionFinanced $112,500 on a 20 year mortgage at 4.69% (adjusts after 5 years)Bank closing costs $1,992Option fee $6,500Total into the property -$2,320 (each of us got $1,160 after getting the loan)Monthly cash flow $195.06 (97.53 each)If the optionee exercises the option just before it expires then we will get the difference between what we still owe on the property and what we are selling the property for and we will split another $50,258 ($25,129 each).Total profit $64,283 ($32,141.50 each).In summary, we will get paid a little less than 3 times the amount than if we were to just sell it.  

I will usually walk the property with the inspector and my General Contractor so that he can confirm or adjust my Rehab estimates.  

They are adjustable rates and balloon after 10 years.

It's a real pita to keep it clean, check the chlorine and adjust, check the ph and adjust, add water when necessary, clean the filter, vacuum the inside, remove dead bugs and leaves, and this is only 20 feet from my back door. 

Typical 5 yr calls and rate adjusts?  

You need to know this so you can adjust your offer accordingly. 

We stair stepped the rent up each month to give them additional time to adjust or find new housing.  

The insurance adjuster has one goal (guess).

@James MarshallOrdinarily, you would be right, but only if the FMV value is less than the adjusted cost basis.

It is going to be looked at as you signed a contract, decided to do repairs on your own and then made a determination of what you felt those repairs are worth and adjusted your rent on your own with no approval from the owner of the property.Many areas have a place where you can pay all of your rent and then file a grievance etc, which would be the way to go.