If they don't, can I adjust the numbers by deducting that box 3 amount from my expenses and also not reporting the Box 3 as income?

If you read the fine print of the quote, they have 30 days to make any "premium adjustments" based on additional inspections. 

Write up a list of questions before you call the first one, write down their answers, and as you learn, add more questions and adjust!

This way I can make proper adjustments for specialized situations.

So I have adjusted the purchase price from $189,900 within the 4-year period of time to $175,000 x 1.03 = $180,250 if they exercise it within the first year, x 1.03 = $185,657 if they exercise the option between user 1 and 2, x 1.03 = $191,227 between years 2 and 3, and $196,964 if they exercise the option between year 3 and 4.The couple requested to do the step up method rather than locking the 4-year price in at $189,900.

What it found is that unleveraged residential properties outperformed everything else on a risk-adjusted basis in both the historic and modern eras.

You need to look that up and then adjust your price from there.

One is to adjust your sell price and try putting it on the market again.

If your Modified Adjusted Gross Income (Income from your job, interest, dividends, ect) is under $100k then you will be able to use the loss generated by your rental to reduce your w2 income.

I live in Denver, so hopefully since it isn’t a climate the bugs normally thrive in treating the unit will take care of the the problem.