Next, is there any legal way to essentially do a form of cash back to the buyers to cover the cost of the repair?

Finding partners to fill in the gaps where your weaknesses are is essential.

I think this demonstrates the power of two is greater than its sum, and it also illustrates why trust in partners is essential.

Windows were left open for a few days, then we returned to remove 3 trailer loads of {predominately} garbage before we could begin the demolition.Here are some pictures of the unit when we regained possession:In the photo below, note the discolouration of the flooring and walls as you travel down the hallway and the rusted baseboard heater (the element had rusted out).  

I do have a good amount of down time to work on upgrading a home, in the winter I essentially don't have to work too much due to the fact that we dont do projects in the winter here in MN.

There's a sticky thread in this forum category titled The Essential Guide on How To Build and Promote Your Buyer's List that is right on point with your question.

It was essentially 4 evenings of the accelerated in-person class.

The fridge kept frying its mother board at the first sign of lightening, the stove has a broken element and fried jet controller.  

My problem is financing.Since my existing rental is new (my bank will not accept that rental income until I have had it for one at least one year), it is essentially weighing me down for the purposes of getting another loan. 

I haven't specifically crunched the numbers, but just wanted to get some opinions.For instance, say I can get the house with $5000 and 20 years at 5% and I could go essentially take the buyers $5000 and then go 25 years at 7%.Another thought is to just do a rent to own type of contract.