@Bjorn Ahlblad I'm not entirely sure and that's part of the problem, we're going to have to tear open flooring to access the issue to even see what it is in the first place.

I'll let you know how things pan out but I anticipate making > 20% CoC returns with lower occupancy (i.e. less wear and tear) so I'm good with that. 

However during that time, you've replaced the roof ($7K), siding ($6k), windows ($6k), HVAC ($8k), all appliances 2-3 times ($5K), cabinets ($3K), and countertops a few times from wear and tear ($3k).

It was just a small bathroom floor and I figured if I messed it up, I could tear it out and try again.

Any special reason your tearing the walls out?

Greetings all,For the purposes of rough calculations, in Gary, Indiana, what are the average per square foot costs to do:1-a light rehab (example: interior paint, new floors, appliances, new doors)vs2-medium rehab (example: light rehab plus new kitchen & bathroom)vs3-Heavy Rehab (example: medium rehab plus new electric, new boilers, new roof & siding)vs4-A full gut vs 5-New constructionMost of the properties I've seen fall between Heavy Rehab and Tear Down/New Construction.Thanks in advance

A safe occupancy level for a three bedroom is seven people (two per bedroom, plus one additional), so it's not safe, it's excess wear-and-tear on the rental, and they are violating it even more by adding three more than you agreed to allow.

Worst I could see is to ask you to tear a house down or not give you a CO?

As long as there is a home on the space and it's not a complete disaster, it is almost always more economical to renovate the home, than it is to tear it down and bring in a new one. 

New construction tear downs is different you need to get those under 30% of the ARV.