I will need to remove the carpet and replace it with something durable and cost effective. 

Capex is usually lower, around 2-5%, since major replacements like roofs or HVAC systems are far off.

My allocation I mentioned above is purely what I would do based on my current financial situation.  

Considering the high deductible on House B, I am only filing a claim for House A, and coming out of pocket for the cost of repairing or replacing the roof for House B. 

Purely an unsecured promissory note.

Congrats - would you ever buy in this market for pure investment purposes or do you think its mostly just a good market for a owner-use vacation home?

That was a huge mistake as they wanted roof replacement & grass cut. $6k for roof, $1200 to cut the grass on 10,000 sqft lot.

Updated backyard with artificial turf, painted entire exterior of home, replaced carpet with vinyl planks.

This GP's ability to move fast and replace bad apartment managers, read where the market is going, and engage (call every LP and explain the situation during a capital call) has led to millions of investor capital being lost.

Stuff as simple as replace cabinets/counters and repaint.