Given these concerns, you might consider asking the seller to either repair the issues or offer a credit to cover estimated repair costs.

We estimate that financing will be about 1% more than going a traditional route. 

Your 11 year estimate on how long it will take to recover my capital does not take into consideration an average 5% increase of rents per year.

I was estimating the ARV at 160-165k which I don’t know what it will be for sure but I’m a little worried it might be less which throws a wrench in things as well. 

This quantitative tightening fights inflation, and Most economists estimate that it adds another 100-150 basis points implicitly to the Fed funds rate so we have really been at 6.375 to 6.675% the last year.

I haven't turned over our estimates as I told our realtor that the estimates won't cover the real cost to us, which is higher due to loss of use (no rental income while work is being done) and time that we'll have to invest in hiring and coordinating the work. 

Christian  I would highly recommend Dealcheck free versionhttps://dealcheck.io/But make sure you give all estimates from tools  a  margin of error.

We are now considering house hacking by buying a neighbor’s house due to our kids' school proximity.Our monthly expenses for our current home are $3,000, and the estimated rental value is $2,300-$2,350.

It took him 3 weeks when originally he gave me an estimate of a week.

You should get some more estimates, but what you are really trying to do is to find someone who has a license and insurance to do it for the cheapest price and that will set off a chain of events that will never end.It's more likely that you bought the house with a wrong scope of work done because you don't have a GC and thought you could DIY it.