This combined with BAH will create great cash flow and we can get a price he can still afford the mortgage if it was vacant. 

If they are functional, they could last another 10-20 years.People have always lived with single-pane windows and will continue to do so.

If any of these ideas are good I would love to see them adopted by normal builders because I don’t like the current type of traditional homes that are on the market, both in terms of design, but also the functional things like pest resistant features that seem to be generally lacking.

You could also do a combination of both.

Timed the market perfectly with the refi and the combination of long term and short term rents is bringing you some amazing cashflow!

Perhaps the private lender can be an equity partner, not just a lender but a partner..and using your combined leverage with a hard money lender can make the money go further.  

Eveything is checking out fine at first glance, but there is an extention that was added to the home of about 250 sqft. that functions as a "sunroom".

I'm also looking for a property that can be functionally improved (with as little effort and risk as possible).For instance, I recently did a rehab on an 100+ year old house that had sat on the market because it was on a somewhat busy street, and it had a funky floorplan (but, because it was in a trendy, A neighborhood, I knew that the busy street wouldn't deter tenants...and I knew I could improve the floorplan). 

Prices are in large part a function of interest rates.

At 100K appraisal if all goes well, yes you may be able to recoup all of the lenders funds or combination of you and the lender.