Added about $2500 of our own money for very light cosmetic updates and did the work ourselves.

Talk to your insurer, but as long as the work was done by a licensed plumber, I suspect they will give you the green light.

Of course, if you are planning to do a 1031, now is the time, in light of the legislation that might get passed outlawing 1031s.

Is it safe to do without the risk of someone stealing the key, leaving lights on, stealing anything?

With land purchase and building, depending on location could be light years apart and so would the approach.

Plus even slowing down the market still naturally appreciates.

Sometimes seeing a home while its raining is a great thing.Inside 1. level floors(some sloping is natural in older homes) 2. lay out.

Sellers will try to get away with this if they can.If you accept the deal like this with a defect, you can be sure that a future note buyer will expect a discount if you don't clean up the issue.As for FOMO, I think it's the nature of the beast for new investors.

For a loan of this size and especially quick nature it would be market to ask for 1-2 points up front. 

Its great that he did a bunch of the legwork, but if he is the one nearby and you are further away, that ist he nature of the partnership.