Local code and building costs are going to be a factor either way.What they need to determine when you add a "Story" to the house is if the foundation can support the extra weight.Here in New England, we have a lot of stone foundations and concern here is that they will shift under the weight, so the solution is to add pilings to support the house and assist the foundation.

If you're buying high-dollar properties in Los Angeles, San Francisco, etc. you shouldn't underestimate the huge impact that 'only" a 2% reduction in a 30 year mortgage can have on cash-flow.  

With these changes and the recent reduction in asking price to $195K, BP calc shows below.  

Do I ask the gentleman to use a licensed contractor, or can I just go tell him to kick rocks (does my agreement hold any weight on his end)?

That's a weight off my chest! 

However, if you have your own real estate agent represent you, then they're focusing on your best interest and your chances of getting the deal unfairly weighted in your favor are greater.

But if you are serious about taking your life and business to the next level then you have to realize that you need to build out your team and a good property manager will be worth their weight in gold.

The local buyers might agree with me as it's been on the market for 5 months ....oddly no price reduction has taken place yet.  

It seems you need PM , you should not be involved with this, just to sign docs the PM will provide PS we have  also gotten about  combined 150k in reductions on taxes of several properties PSS attorneys have nothing to do with it nor are needed.

Also, I have a question on HOW I should negotiate them,  Should i ask for a price reduction, Should i ask for a credit, or Should I involve the lender so they require the seller remedied the defect before closing.