Regarding the 1% rule, does it apply to the price the property was purchased alone or the price of the house plus repair cost?

Also read the MO Agreement of Sale483/16/2021Stone Cold Day493/17/202112:45 PM1:00 PMEmailed Tyson about the property on Dunnica that looks promising503/18/2021513/19/20217:50 PM8:05 PMSent Tyson an email about getting in to Dunnica and a house he sent over on California523/20/20218:05 AM8:20 AM533/21/20212:00 PM3:30 PMVisited 3400 Dunnica and two properties on Califormia543/22/20217:45 PM8:00 PMAdded a 10 year cash flow and CoC ROI column to my spreadsheet553/23/20217:05 PM7:20 PM563/24/2021573/25/20215:00 PM7:30 PMStL REI Happy Hour583/26/20216:05 PM6:20 PMFilled out most of a loan application with Flat Branch, but then got nervous I was actually applying for a loan as opposed to a getting a pre-approval593/27/2021603/28/202111:00 AM11:15 AMWalked through my spreadsheet with Tyson613/29/20217:50 PM8:05 PMSpoke with Jacob Day from Flat Branch lending and confirmed the application was just a pre-approval so I submitted.

I'm not sure if that maxim still applies to the 203k. 

A 1031 exchange does not apply for a couple reasons.

The way I see it, you can take the exact same principles and apply it to buying something like a classic car.

So if you wanted to sell the investment after time and use this as your primary & house hacking until ‘dream home’ days, you could sell and pay off the original loan balance and go this route or pay off original loan amount without selling and keeping it and apply for the one time benefit restoration - which is not the same as entitlement re- installment for active/permanent change of station orders or foreclosed upon properties. 

@Chris Collins excellent tips for when applying.

I'd like to create an official rent contract applied to the room they'll be staying in, but want to ensure this is fine within context of the loan (assume primary occupancy still valid since only renting room).

The Rider reads: "This form applies only if form 3522 1/01 are used" (it was).

I'm curious, why didn't you and the tenant apply way before it got to this point?