We're also considering owner occupancy.

You cannot purchase until it appears and goes through the initial owner occupant period

Therefore, I got an extra nine months of occupancy, but it included a new roommate (which I vetted). 

However, something with the seller's Schedule C isn't lining up with my expectations.I was told by the seller that they have maintained around 37% occupancy over the last 12 months, and I know the amount the seller has said that the cabins are rented for.

I prorate the second month's rent based upon the occupancy days in the first month, that way I am collecting the maximum amount allowed by Michigan laws before they move in. 

Its for owner occupants.

Until that time they still have occupancy.

Repair costs may be 5-10k just for paint, new doors, and some landscaping]Occupancy = has tenant.

I'd love to buy another duplex after my one year minimum occupancy is up on this one, but I have about $12k in rehab debt.

It seems that the buyer (not an investor, but a would-be owner occupant) actually had multiple contracts out at the same time, and was using an inspector like this to fabricate inspection items and negotiate price.