Can we slow down the depreciation in the first 5 yrs to match closer to the cash flow deliver to optimize annual taxes on the this deal while reducing the recapture that will occur if sold within 5yrs?

Two homes on one property is a "two unit property," not treated differently than a duplex.Correct, not a model match for super beat up real estate. 

But I don't think it is very retro to match the cabinets.

Sources--water source, well or public, if well check it, is it working, water flow adequate, water quality, when last tested and results, is the water shared, age of pump, holding tank size, etc., sewage, sewer or septic, if septic, where is the tank and where is leach field, is the leach filed area soggy?

You can contribute each year to match your earnings up to the limit( depends on account type and IRS limits for the year) at brokerage or bank IRA and invest in investments you feel comfortable with like stocks, bonds, mutual funds and cd's. 

Take a look at the comps on the appraisal and do they closely match the home you want to purchase.

So I will use 80% (the approximate average improvement part) of $295,000 as the assessed value basis which results in a roughly $2,600 (some fees added per WC.)

Depending on the strength of the borrower, this tactic either results in a lower rate, or a bad reputation.

I preferred the DEFINITE money to the MAYBE money, even if it meant I might have left money on the table (not all storm warnings result in a storm).

When the password didn't match, I got the alert.