It's a 3% tax rate on a purchase price of $125,000, the assumption that insurance is about $1000 for just the basic policy, and the annual HOA fee of $450.

The standard PA transfer tax is 2%. 

They'll also want to know if you can handle the carrying costs like interest, electric, water, sewer, garbage, house insurance covering construction, etc, etc, while you're doing the renovation.

The standard for a lender is 10% cash on cash going in and after a reserve for replacements (and insurance) that I don't see here.

If your area doesn't license contractors I assume any legitimate company with the proper insurance to pull permits would be acceptable. 

Would it become more of a standard residential sale at that point? 

Insurance of $2,400.

One big question is insuring that storage.

My taxes are around 2100 yr with insurance at around $600.Is my investment in this property the 17600 difference between the current loan amount and the original value?

That has been standard protocol on the three HML deals I have done.