What you want to avoid is having your coverage dropped.

I'm trying to avoid backing myself into a corner here. 

Generally, I would avoid trying to "time" the market.

Why not just partner with him and avoid the 2 closing costs?

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

Any wholesaler worth their salt is taught to avoid you guys like the plague. 

If you intend to have the cars towed, calling him and telling him this a week or so ahead of time would give him some time to move them.That way you avoid (as much as possible) making an enemy both with online reviews and in person.Just my 2 cents.

I would personally wait a year or two until after rehab, when you are able to pull more money out and avoid paying high points.

He told me he needs 385k to avoid foreclosure and pay off his debts to the house. 

Definitely learned an insane amount and things to avoid or budget for better.That said my original est for rental rate also went up so i am right at the 1% rule as long as it rents.