To me, it seems like a very reasonable way to pay as little interest as possible for the longest amount of time. 

I filed a claim with bank but bank mentioned they will try to recover the money if there is money in the amount. but its not guaranteed.

I’ve ran the numbers and have an offer in mind but not sure if that 2% should be worked into the offer or just “cover x amount of closing costs.” 

Moore Those are all easy fixes and mostly inconsequential anyway.

My first suggestion is learn as much as you can about real estate financing and your local market first if you never done real estate investment before especially if your thinking of fix & flip. before venturing more than 1 hour drive from your home.

It's more complex than other types of businesses due mostly to the amount of items that need to be capitalized.

@jake knight All Good points  @Jeremy Tallman I have one in Brownsburg (Hendricks County) that doubled, but another one around the corner that increased a reasonable amount - (same square footage). 

Renovation of fixtures and cosmetics without mechanicals about half that amount.

We like to see at least 10% of the loan amount in a checking or savings account.

This may mean picking up something that needs work or something that has a unique issue that turns homeowners away that you might need to fix at some point, but it's possible to still make money in GR.