The re-positioning plan will be specific to your strategy and property, particularly the pace that you want to realize the value for future deals and your debt structure.Regarding the test scenario, if it works, the $50-75/mo incremental increase will certainly justify the rehab cost you mentioned at most any market cap.  

With the US elections and the global financial troubles in the news lately, it seems risky to go all in on this venture.

I don't invest as much as you in debt, I prefer equity but your track record in PoL is excellent.  

I have been in manufacturing for almost thirty years and I feel I need to make a move toward financial independence. 

I don’t know your financial situation or how much you earn a year – but may I assume that an extra $10,000 per month on a continuous basis would free you from your slave wage job and give you the courage to do real estate full time?

But not sure of their exact financial situation, because they didn't feel comfortable sharing any more details than what I have.

I always go to view the properties and meet with the property owner or person handling all paperwork and financial responsibilities on that particular property. 

Im 25 now, pinching pennies and paying off debt to reduce my DTI ratio and increase my credit score.

The #'s still work if i can get it filled, but there would now be time and $ hurdles to clear before getting back to the financials I thought I'd be stepping in with.Now that the situation has changed, am I still obligated to go through with things or forfeit my earnest money?

I'm a 26 y/o professional and looking for both financial stability in the long-run, as well as supplemental income in the short-run.