In the end, I ended up doing a rehab that included new flooring in the entire house, painting the entire interior (two tones), a new roof, a moderate amount of plumbing and electrical repair/replacement, new windows and blinds, kitchen remodel (new flooring, new lighting, cabinet refinishing, new appliances, etc), extensive plaster wall/ceiling repair, plus an endless amount of cosmetic work inside and out.

All new appliances  and cabinets to include granite counter tops.  

You can fail from anything to a handle being off a kitchen cabinet to low water pressure.

You can find a lot of people to hang them for 25 each very easily.Exterior Doors- $400 ea - 100 bucks less.Kitchen- $4000 (includes cabinets, counter top, appliances, sink) What kind of cabinets, countertop, appliances?

So your correct to advise your folks on the reality of selling owner occ.. not that it could not happen I sold all my owner occ but one... but the owner occ is very picky its not like a renter or a landlord.I think the exit realistically is to another landlord unless they want to do a complete over haul like you do now before you sell them to these folks.. they will need everything brand new roof HVAC windows paint flooring up grade cabinets applainces.. for me just to sell mine I spent 5 to 15k on each home to get them sold.. so from my point of view your message is right one.. buy them hold them pay them off .. if some how they can get sold OO great but don't expect it.

Sheetrock will be repaired on all walls beforehand if neededFlooring- Install tile, Resilient Plank Vinyl Flooring in Cherry, and refinish all existing hardwood floors where neededKitchen Repair- Paint cabinets and add new formica countertops with granite look where applicableBathroom- Repair or replace all bathroom toilets, sinks, tile, vanity, shower heads and bathtubDumpster- To haul away debrisHardware Package- Replace all door knobs, blinds, A/C vent covers, light fixtures, and receptaclesFinal Clean- Deep interior clean to get property camera ready for professional final rental listing photosMore images of the Interior to follow....

This is assuming it is all cosmetic (flooring, kitchen cabinets, bathroom vanities, etc)? 

For an average $140K house, lot worth $20K, how much of the overall cost of the house would apply ( rough estimate - roof, AC, cabinets?

Here are some things to consider below.Kitchen pantriesSoft closing cabinets Dovetail joints - Adds a nicer finish to the cabinetry With a higher-end rental, you might consider a pot filler above the range The latest trend in cabinet colors and paints - you can use Pinterest for thisFloating Shelves - reduce cost and adds aesthetic to the feel (base shelves are more expensive than uppers)Functionality is key - Storage for plates, pots, and pans 12x24 tile flooring offers the best bang for the buck Splurge on the backsplash because it is very inexpensive to do adds appealDepending on the dimensions of the room, you may consider a smaller upper cabinetHope this was helpful BP family!

Because they could (will) come back and say "oh I bid you cabinets as contractor grade...you wanted custom?