I would expect current cost indexed for inflation at 3% per year compounded annually.

Not CA & FL kind of hot where the prices are inflating without regard for real value.  

$5,000 for a roof in 2015 with 3% inflation for 20 years would be approximately $9,000 in 2035.

It seems odd they are willing to structure in this way, knowing I will Pay them out within 6 months.  

Your guess at a $40,000 increase since your purchase may also be inflated.  

I had a 3.00% interest rate but I would not gain the benefit of the continued devaluation of the currency and inflation along with it killing my cash flow but knocking out my principal.Again this was part of the learning process and BP along with other real estate investment books helped me understand this.

When doing rehabs never squeeze your rehab costs, inflate your sales price and underestimate holding time just to get your offer accepted.

You'll learn from your mistakes and get better results each time.Here are some of the mistakes I made:Mailpiece - A poorly designed mailpiece will greatly reduce your odds of getting a phone call that will lead to a deal.

You do not want to inflate the price at which you are selling (predatory practice).I'm sure there is much more - we have only used lease + option deals when we have not other means to divest a property (or when helping a family member) and they are not a mainstay of our business.  

Many of them over inflate the ARV's and the comps, under inflate the rehab costs and jack up the price of a $100k home with a $10-$15k fee!