I can think of no reason that someone would remain inside a unit that could potentially kill them, so the only logical thing for him to do is to vacate the premises.Renters insurance is obtained so that "Loss of use" is covered and the assumption is that the tenant has that or should have obtained a policy.

If you wanted to be conservative you should run the numbers with the assumption that rates may go up or you need to extend your hard money loan another 6-12 months.  

@Jd Martin - I was working with the assumption that I would find a refinance based on the appraised cost.  

Any foundation work is big ticket item, so before making any assumption, take in mind that there is definitely some work to be done, and some work done before and still failing.  

Where's your maintenance assumption from?

I'm making an assumption that you haven't purchased your first property just by how the post reads.This isn't rocket science.  

 $800/month rent with an ARV of $105k will not cash flow (with fully loaded assumptions).  

I'd worry more about validating your assumption that you can raise the rent from $500 to $600.

If you want to move forward, you can make informed assumptions about things like rent and expenses.  

If someone is tight on cash to close, I might even quote at negative discount points (which is just what it sounds like).Internet lenders, on the other hand, if you actually read the small print and the "Walk On Water" assumptions they make to arrive at that killer advertised/quoted interest rate....