Bye-the-way, I've seen some high-end properties in high-end neighborhoods and several have been 'move-in-ready' but still needed a coat of paint in one or two rooms and/or new carpet or fresh shampoo, clean-up in the yard - maybe a new microwave, etc. 

. $1,500 for initial repairs is barely a fresh coat of paint for the house.

Seller Disclosure revealed that there had been a fire from the fan in the bathroom that spread into the attic.

.,) is replaced at acquisition so house is in great condition- no intent of ever paying off the house- appreciation being normal at 3% for this scenario- cashflow being $400 month, figuring $200 of the $400 for future repairs and vacancy- sell and pay capital gains tax rather than 1031So in my scenario I figure most everything has a 10 year life span...AC, faucets, dishwasher, water heater, will need all fresh paint inside and out, etc. 

Oh how I wish I could turn back the clock...Having said that, in the event that this is a case of an over-conservative banker (maybe they have fresh wounds from other nearby properties) or simply a matter of you talking to the wrong bank (not every bank finances everything, their appetite for loans can be specialized or even change over time), you do have options.

How do I know they are not just trying to grab any fresh blood that they can?

You could heat treat today and someone could carry in a fresh live bedbug tomorrow.

The second guy was very eccentric, acknowledged any credit check would reveal a bad credit history including he claimed lawsuits.

I plan on cleaning shop and starting fresh once the dust settles and my tenants are happy in their units. 

Do it all in one step and start fresh with your own new tenant.