If you issue a note, there is a risk unless it is the first lien position.

If you paid too much for the property, and your rehab costs aren't in line, then you're in the property too high, and (even with a good appraisal), you won't be in a good cash/leverage position

Even an appraiser reacts to positive and negative design features.Feel free to contact me with any questions.Cheers!

As long as your mortgage payments don't turn your positive cash flow into negative cash flow

I'd assume intent is to control messaging to try to ensure property values are maintained... 

Obviously I know learning how to do this stuff will save me tons of money down the line, but I'd also like to maintain a professional feel to our house, and have professionals work on anything broken.At the end of the day, is this ok?

Income is the rent - annual depreciation of the structure - any other expenses that went into the owning/maintaining of the RE. 

You've had conversations with the borrower and I have not, so you're in a much better position to guide her. 

If the number is positive, you add it to your income. 

The owner may be taking the position that since you passed your inspection period/attorney review period if you have one (I am assuming this) that either you close as per contract or you don’t, and perhaps you lose your EM.