I feel as if this investment might be a gamble with this open permit, considering it most likely has to pass inspections before the permit is closed.

Of course, you can also just gamble and go with the cheapest PMC, but you'll usually get exactly what you pay for.

but in my view it makes a relatively "safe" investment in cash flowing real estate into a gamble on appreciation.    

So as far as the percentage to compensate them - that really depends on who is doing what and for how long. 20% of a deal that will only get $10k of profit at the end isn’t very attractive - but that’s the gamble you take with equity.

This is Called GAMBLING.

OFF shore bad english etc etc all HUGE RED FLAGS Caveat Emptor 

As a contractor I always prefer a full gut but it does eat away the rehab cost and takes longer but no stress about plumbing, leaks, electric, lead paint and etc in the future.The patch up would cost less, fast timing, but then you are gambling with what's behind the wall and hoping nothing happens in the future.I assume most house that are purchase for BRRRR purpose are in distress/bad condition and old on some occasion.What rehab number would you go for?

Sounds like you did not do any homework and its going to kick you in the butt and it sounds like you gambled on this one. 

Definitely up, so the gamble on rates cannot go your way.I had one ARM in the past, and it went my way when it adjusted, but only because the market collapsed.

@Harry Gamble The cost of insurance will vary greatly based on the individual property types, specifics, and locations.