I mark the applications down as they come in to keep track of the order in which people applied, and they have to follow up with employment verification, background check, references as well so I can tell who is the most qualified and serious applicant pretty easily. 

The reasons they identified will not impress the judge and you will win as long as you followed the proper procedures.There is no way to ensure that they won't damage the property, but you have recourse if they do.

I think if I furnish it I should easily get the same $2500 or more

If you plan on leaving after a year, rates will be much higher to refinance this as an investment home so doing the buy down probably wins out in that situation.

This can easily be obtained by spending it on materials you will be buying regardless.

It sounds like a big win.

Someone else may say its free money and let it ride, so invest it in something super high risk and high reward and if I win they I win but if I lose it all I lose it all. 

.- You could also try selling to another naive investor, but you don't have the infrastructure to do so easily. 2) You'll need to evict the tenant if you haven't already.3) Have 2-3 agents tour the property and take videos of their recommendations of repairs.4) Review all of these to create consensus Scope Of Work (SOW). 5) Get 2-4 bids on the SOW6) Review bids to determine cost effectiveness of what to actually do.

But leveraged  appreciation on better appreciating homes and areas will win out every time.

You want to make both parties happy.Most wholesalers fail because they are chasing the spread (their money) and not focused on helping the seller and providing a win-win for the buyer.