You only have to purchase the property for cash and wait out the rental contract taking that negative cash loss which is ultimately reimbursed to you by that buyer when he purchases it at XXXK.It is all about the property matching your buyers needs to quickly flip it.

I’m thinking about having main tenants (top two floors) pay all utilities and reimburse them for half every month to offset basement usage.

You cant get pain and suffering damage from your contractor, so you might have to move on from wanting more legal recourse.Your main job I think is to make sure your costs are being reimbursed based on contractor bids and to ask for more if needed (its all a negotiation with insurance).  2nd job is to make repairs and move on. 

The rehab can be financed into the loan, but it's a reimbursement, so you won't get any money up front for the rehab work.Or you can try to find a partner to bring in the money.

It worked out in the end, but the bank wanted my client to reimburse their attorney fees.

There may be additional requirements for cash reserves in case the project goes over budget, the HML wants to know you have the means to finish it.Also for a rehab, typically you have to front the expenses, and then will be reimbursed after it's inspected (draw schedule).The last rehab I did for $50k purchase and $25k rehab, I had to have about $30k in cash to get the deal approved ($10k down, $10k to start rehab, $10k reserves).  

If this is your first deal with this partner and it went relatively well (aka you'd like there to be a second, third, so on ...) then try to reimburse the cap partner with as much of his initial investment as possible...After that you can pay split the cash flows 50 / 50.If there's a very healthy amount of equity in the deal - consider paying him a return on his initial investment in exchange for a greater percentage of the asset. 

And best of all, you can be reimbursed by your investors for all of the upfront expenses you incur for providing the documents that protect you.

She'll have to reimburse me for property taxes and insurance while she lives there, she'll still be responsible for lawn care/etc, and she can stay for up to 1 year.

I too reimbursed for approved tenants.