The idea is that they want to push any slip and fall claims out to the contractor.

Don't get me wrong, many things to learn from this n that, I love @David Greene, @Brandon Turner and the like but wayyyy to many expect it to be like buying a McDonalds franchise; just buy xyz book/program/mentorship and now count the money that rolls in, no it's not like that at all, and I call out all the "guru" programs that promise such for the snake oil salesman they are. 

I'm also concerned because in my counties, the water utility  will never be shut off, it simply rolls over to the property owner if unpaid by the tenant.   

I've given them notice that we wish to terminate the lease, but they are pushing back and don't want to leave.

Prorate move in, due on 1st, late on 5th, etc. for everyone.It does add a rush at the beginning of the month, but we heavily/require push auto-pay so it's not as much of an issue with each passing month.

If they're asking for points going in at the closing table, that's normal.I'm in the process of doing my first private money loan, and the borrower will be rolling 1 additional point into the the loan.

I've heard if you aren't able to check on the rehab often it can go over budget and push the timeline out quite a bit.

He needed the money to push work on a 14 unit apartment building which is almost done and was supposed to be refinanced to finish the fix with the new construction loan and also he was to pay me back from that refi.

In other words, push responsibility for deposit to the tenant.

I am in agreement with @Will Fraser where there is a difference in investing from speculation.Yes the surrounding areas are some of the hottest in Philly, with new construction all over the place, but it's very hard to imagine that he development will push up into those areas.