Being willing to adjust your expectations of what is a "normal" living situation can propel you much further than you might expect.

They came and found 12 items, mostly small things like broken floor tile, bathroom mildew, a hole in the wall.

There is a lot more inventory than I expected.

I'm hardly an expert, but your description of how to proceed sounds like what I'd typically expect from a seller finance situation.

Since you're a newer investor, I'd expect your rates to be around 12% and 3pts with 10% down payment.Your comps should dictate what you do to your house (in regards to that extra bathroom), not your own personal opinions or anyone else's.See if you can bring a contractor (to get bids) and inspector (to find out what's wrong with the house and determine your scope of work) to the house.What program are you with? 

Tell the buyer you’ll walk with the contractor , he doesn’t need to spend he’s precious time to walk half broken houses with contractors 😉

Below I have broken down the income and expenses for the property I am thinking about making an offer on, there are four different scenarios that I have listed; a 5% down payment where I live in one side, a 5% down payment after I move out and rent both sides, and a 20% down payment for each situation as well.

What type of loan term you have and what would be the expected cashflow based on the loan terms?

@Julie Hill What option(s) you decide to take will be dependent on: Balance sheet  - how many $ are you willing to invest, how quickly and for how long;Time commitment;Risk/return expectations - newbie investor only look @ returns, whereas they should be focusing on understanding riskLiquidity and risk tolerance - closely linked with the earlier point on risk/return expectations.I would focus on picking a niche and taking a deep-dive.

If you accept a 10 day inspection period do so expecting it to take all 10 days.