I've requested more info on the 10%, but that's my understanding.In terms of why, there are more extensive foundation repairs then initially estimated, termite treatments, and underestimating finish out in general are driving the incremental costs. 

It is the job of the termite inspector to identify the damage and recommend the appropriate treatment and repairs.

On a less related note, what are the tax treatments like for owning property for wherever you pay taxes?

@Jordan Northrup, Sorry to say but securities are specifically exempted from 1031 treatment.  

Looking for different ideas for durable window treatments for privacy for rental properties?

If you are thinking rehab and resell, then documenting every step, showing you waited for all the framing to get dry enough to re-drywall and perhaps getting pro mold treatment with a warrenty would help mitigate flood value loss.

If your CPA or cost segregation firm are doing that for these interior rehab items, that is a poor tax treatment.  

@Toni Annis banker is partially correct regarding the 1031 portion of things.To qualify for 1031 treatment the tax payer for the old property needs to be the same tax payer for the new property.  

An LLC owned by husband-and-wife is given the same joint tax treatment as your joint return would.

This way the IRS can't challenge your valuation by asserting the other party has treated the transaction inconsistently with your treatment.