In addition, those props are often tenanted by Section 8 recipients, which adds in a whole other slew of red tape nonsense.

The appraiser should be comparing square footage, unit count, unit mix etc, but the valuation based on income will only be used to validate the comparable sales approach (or not at all).Did you read the entire report to determine how the appraiser came to $318K?  

I'm looking to give the residents an accurate idea of what their land is worth by the square foot.

For me theres lots of red flags in what he's telling you and I've dealt with a lot of them.

If you've never used a manager before, do some research on what a good one should look like, red flags to look out for, etc.

I doubled the square feet and added a bedroom by finishing the basement.

In short, your own deal....The neat part of real estate is being your own boss and waiting for others' arbitrary green or red lights seems limiting and frustrating; that runs counter to why I am in rei....Also, I think investing with family can be a no win situation....

No amount of drywall mud or paint will correct walls that aren't framed straight, square and  level.

Some red flags may come up during the inspection that you may not be aware of, especially since they countered with the two deals.

as well, know your market and what the homes in the area are selling for that are similar in square footage and finishes to yours?