The rate we have is a) the lowest they have, and b) discounted a result of relationships we set up (checking, savings, debit card, online banking etc).

Being on the far side of the highway may discount it but the views could easily compensate.  

These places generally have big discounts and  the people running them are very knowledgeable. 

If appraisal done - will they take into account additional bedroom or they will discount value based on unpermitted room?

I attribute their willingness to sell at a 40% discount to their fear of what is happening with the virus.Many will say, "why buy when you can't collect rent now?" 

Basically what I am trying to say is when you are purchasing you are getting the discount on the buyside relative to what the market would pay.

We could just have each property have a different homeowners insurance company, but then we worry we may be missing out on potential discounts for bundling everything together. 

PS - I won't discount my places for longer stays, I don't want longer stays.....14 day max stay, no discount....

So I'm more likely to own that unit for 10 years and be able to realize the biggest benefit which is the value increase to the property when I no longer have to rent any of the units at a discount.

Seeing you mention the 30-40% below is a discount I have seen quite a few other investors citing as their requirement in this current market.