Often Rehabbers & Wholesalaers will use the 70% Rule (quick analysis) to quickly evaluate a deal and then use the Max Purchase Price Formula (detailed analysis) to perform a more accurate calculation before they get the property under contract.

And charge $500 for early termination fee's with no mention of recourse on lack/no-performance on their part?

This would also probably have you "tied up" in the current project and unable to move on any "great deal" that may come along during that project.2) You can leverage capital (using Hard Money) and relinquish control of the project management to a third party.

Or is it a second or third mortgage. 

However, it also depends what exactly those expenses are, e.g. unnecessary payroll would be something you should be able to correct (and if you lower it, you increase the value of the Facility); high flood insurance or excessive property taxes are what they are and typically cannot be reduced, very well throwing off the "industry standard".Typically we recommend buying a Facility as it is currently performing (past 12 months) and use a pro forma only for where you can realistically take it. 

So to perform Property Management a Broker must be involved.

What about the third option: not able to be deducted by both parties?

Hint: this is now the third time its come back in my lap.

As I mentioned I would strongly consider adding a third bedroom to the other unit if the current tenant is to move to increase rent as well.

The agent value comes in analyzing the value, neighborhood trend/knowledge, how to read/research the seller as to motivation, protective and trap clauses in the wording of the contract, which lenders actually perform, which title companies to avoid, which inspectors to use/avoid, how to negotiate when problems occur prior to closing, etc, etc.....all of which You you are not experienced/competent in.So, You decide.