I also have found local lenders aremore expensive than national lenders because of conservative nature so best route is really private money.

@Hersh M. for me, rather than trying to predict the market based on previous cycles, I would highly recommend investing (particularly in today's market) for cash flow, or forced appreciation - NOT natural appreciation.There are a lot of people that believe that we are in the 9th inning - specifically for large multi-family markets - and if that's the case and the market shows a correction, it will be key for people to be able to carry the expenses of their rentals no matter what the market's valuation is of the property.However, for people that are investing hoping that their properties are going to go up, since that's what happened over the past 7+/- years, that is typically where we see bubbles forming.I am not sure that answered your question of where we are in the market, but I do believe that's one of the reasons that causes a lot of market cycles to form.

Now back to the real, or at least more consistent world: drywall costs vary as to the unique nature of each job location, therefore comparing estimates without details is an exercise in futility. 

What are the cost & nature of the upgrades?

The basic idea with MB is that when developers and government infrastructure projects etc. unavoidably must destroy natural "habitat," they must either restore it or else offset the damage by purchasing credits in certified mitigation banks to preserve multiple acres more of habitat than was taken out.

When that happens, the profit naturally follows, and with fewer landlord headaches.

It's encouraging to hear that things will become more natural as you progress. 

Naturally, he doesn't want to move there due to the long distance to work.

This rental increase can be extremely disruptive to the repeat business that many homeowners rely on.Many Cape and Islands homeowners struggle economically due to the very seasonal nature of business here.

Naturally you like the higher rent this prospect offered, but I wonder if you should advertise the unit at a higher rent -- perhaps $1700 is below market -- and wait for a stronger tenant (without a dog and three teenage sons).