Or do I reduce the listing price by $50k?

To me he is asking for you to do a walk through video of it before he books it.

Or do I have to actually have the work completed already and paid for with receipts to include in the itemized deduction?

How many water heaters do you want to deal with?

The mid-term rental is south of the south loop and also doing quite well.  

What concerns me most is that statement: "I have yet to have a conversation with a seller"Here's the truth: It'll probably take talking to 50-100 prospective sellers before you even have a shot at getting a deal.You don't get to change that.You do get to decide how long you'll take to get those conversations completed.Reach just 1-2 sellers per week and it'll take you a year or two before you get a deal.Reach 10 sellers per weekday, and you'll likely get a deal within a month!

Do you require a personal guarantee? 

The owner is a good friend of ours and agreed to do a deal with us if we helped him rehab the property.

Do you have liquidity to close the property in cash?

So, trying to convince her to have a stranger share a bathroom might be the most challenging feat I've faced.