If you really want to do a quasi owner finance for your friend to pay off the property within 3 - 4 years, you could simply set a monthly rent that is high enough to accomplish that goal, do a 6-month purchase contract and reduce the purchase price each time by whatever he's paid, with a handshake that you would adjust the actual purchase price, if he ever decided to finance it in the middle of a contract term.  

My advice, find out about previous repairs, if house sits on expansive soil or what type of land it sits on and if on expansive soil, pass on it because you will constantly be throwing thousands of dollars towards beam placement or adjustments.

Adjusting seller expectations will have you walking a fine line between reason, and emotion. 

Any comps that are less than perfect must be adjusted. 

I figure this would be much more beneficial to have the plan laid out for the investor and be able to adjust it, rather than start from scratch from day one.

., anything affecting the profitability of the project, Will there be an adjustment made to the profit participation of the investors?

@Alma Mills House rules for bank is 43% of your gross income, less monthly expenses can go to housing, banks established that for a reason, to keep them out of trouble, adjusting your criteria might be possible, but you aren't that as secured as a bank.

I am in no way proposing to adjust the deal acquisition / reposition based on a 60% occupancy.

I am a buy and hold investor but can see how increasing rates will affect my cashflow and acceleration of my business.Anyone have any ideas how to adjust their plans?

IF that is not possible, there are industry standards you can use to help estimate but have to be adjusted depending on the utility rate for the area.