I comped houses with similar square feet and found theres enough sq feet for 2 additional bedrooms, potentially hitting the 352k range. owned the property for a little over a year, with a 50k downpayment. original loan = 333kfinanced = 281kcurrent value = 340k (according to his loan officer)Ive ran it through the usual 70-80% formulas but wanted some extra opinions/ weigh ins before i send him my offer. of course i dont want to insult him, being family and all, but he understands the convenience factor im providing.

Turn it around and use it to your advantage because this is the truth!

If the company uses their own application it may ask if there is a mortgagee and you would need to answer that truthfully. 

BTW, i have extra liability insurance, due to no LLC protection.

I want to be proactive for next time, I thinking of budgeting 20% extra on top of the estimate to cover myself from them.

Given you are in Milwaukee where I would assume home prices are still reasonable, you could buy 5 rental properties that would cash flow ~$250 a month each or an extra $15,000 a year total.

I have a park with some extra land, I can explore this idea too. 

Should I ask the bank for an extra amount (maybe 1.5x my estimated repair costs) to cover for incidentals? 

if you want to just blow tons of extra money and do it that way you can or you can be a little bit smarter and avoid all that.

I would try to work with the tenant and make a payment plan to get the higher deposit or increase the rent to market value (If your market support it) and not asking for extra deposit.I have a 7 month old puppy in my own house and when she was younger she did some damage (Chew some drywall and trim (But she's still cute :) )) but she grew out of that phase.