I manage 400 rentals and the most significant claim ever filed was a kitchen fire that cost $20,000.

You'll find that rental property investing isn't scary at all and a great property manager can actually save you more money than they will cost!

It's important to run your own comps and go out to the property with a contractor so that you can get an idea of true renovation costs. 

Are there any rehab costs?

Also your permitting process, type or land, grade of land, if underpinning is required will all play a factor into your cost. 

If I can make a suggestion...Yes with 3 points you might be able to get into the 6's - but let me give a quick example:Let's say loan amount is $250k and making some other assumptions, paying 3 points down would cost $7,500 however that might only save $195/mo. 

If its four months from now, then explain to him he's going to be evicted, will have a record, and it will go to collections for all court costs and rent money owed, to the penny.

The location all in,cost him X; he got an appraisal for the bank from CBRE national firmof XX and now the firm who called him mentioned paying XXX.

Happy to help should you need any cost segregation advice.Cheers

(So unless they sell for much more than they paid they will only get a small percent of their down back, especially after selling costs,) but you did say they were getting a discount.