Throughout the year I come across situations where people need to sell there home due to a variety or reasons, job loss, income loss, health, divorce, etc.

If you reduce to $2,300 and are able to fill the property faster, yes, you are "losing" $100 per month, but even at that rate, it would take two whole years to equal the loss of the $2,400 vacancy month.

You may want to see if each partner has enough passive loss carryforward to offset the gain.

I've decided that finding "deals" in Arizona is unnecessary as there are other markets that one need not search high and low to find something that can produce a decent cash-on-cash return.

After some research online, I am reading that the cost per square foot on a gut renovation of this nature in Stamford CT is anywhere from $150-$350, which is ultimately not very helpful, because at $150 per sq ft, this is a very appealing project with a total profit of ~$175K (46% ROI) and at $350 per sq ft, it very much isn't, because it would be a net loss of 83K (haha).QUESTIONS:What can I do refine my estimate a bit given that I am not allowed to a formal inspection on the property? 

There’s no real way to create phantom losses without running into issues with the IRS, and you could end up losing important tax benefits.

My takeaway was never to tell the insurance about a loss unless you actually do have a loss.  

But he did take a loss that set his family back quite a bit, caused a lot of stress in his marriage, prevented them from being able to buy the new home his wife wanted with the right number of bedrooms for his kids, set him back years in saving for retirement and buying investment properties that could have made him money instead of losing money, etc.

This is advertised as a “protected” note as Aloha is supposedly fronting the first $100k in the line of loss.

That might cause you unnecessary stress and lead to dropped balls for your clients.