Give them a 60-day notice, then charge them a prorated rent for the additional 20-day extension.

This is an additional step that would not be present for developing a lot where you are adding value.  

Coffered ceilings, low corner additions etc.Anyone can slap lipstick on a pig, looking for high value add in high demand markets is where the $ is.

If you are able to add an additional full bath, it sets you apart in the market big time! 

I've personally done just about every rehab scenario, properties I've lived in, properties bought as investments and even properties bought at auction.You've gotten good advice from folks on this list.

Additionally, their marketing was very compelling.

Quote from @Tove Fox: I live in California and am interested in purchasing my first investment property in an A or B neighborhood in one of the above states, ideally under $300k.

I have lived in Santa Fe for 5 years and am plugged into the commercial RE market as a full-time investor. 

There are cheaper one’s in D/F areas but I would be careful as those can create a laundry list of additional issues.

Whether the seller was open to a buyer commission or not, I wouldn't put an additional cost into any personal purchase.