So we decided to write an agreement letter explaining we will use the $1000 of deposit towards the last months rent to help her move and we would wave the $50 pet fee if she met the following conditions:1.

So at ~7 years of useful life that's about 70% of value... what happens if I charge them $200 for deodorizing and then decide to replace the floors?

Now let's see how your projections play out against real life!

The loan terms that they had for the condition of the houses were pretty subpar even by owner finance terms.

Based on life cycle cost its cheaper. 

Most of my analysis is based on paying at or near asking price, but I'll come out of the gate 10-20% lower on my offer based on the condition of the property.

So at ~7 years of useful life that's about 70% of value... what happens if I charge them $200 for deodorizing and then decide to replace the floors?

If you charge a move in fee, what is the incentive for the tenant to leave the property in a good condition on move out?  

The other one has less value add opportunity but the location made me go for it even with less value add opportunity (so it is ~$30K below market and cash flowing but not in bad enough condition to expect a rehab would return the type of profit I expect from a rehab: I typically want at least 50% return on the rehab investment. 

Now, your soil profile will not change that dramatically over your life time... and if a couple of inches of topsoil washes away, it will not affect the pile.