So for three years there is a penalty if you sell, or refi. 

My thought is why charge so much money to people who are clearly desperate to make some money in real estate investing and sell them on their own desperation to make money?

If you have equity, consider pulling out money to invest with a home equity line of credit.Also, because you have a schedule that can allow you to actively work as a Realtor, I would encourage you to get your real estate license, as I did, and begin networking with other local investors and helping your sphere of influence buy, sell, and invest.

Full disclosure: I'm a licensed broker but don't actively sell any RE.

That was a good buy, and it did sell right away!

What would the average be for buying costs and what would it be for selling costs?

Hi @Brian Mitchell This is my specialty and I have helped dozens of other BP members buy and sell in this area.

The property is still in distress and I put it on the market to sell.

Homeowners have ALWAYS had the option to sell their own home. 

Identifying a d purchasing properties that are undervalued due to under market rents caused by owners with a lower purchase basis that are terrified of losing tenants and raising rents, will definitely provide you with immediate upside appreciation when adjusting rents to market rates as well as covering all your holding costs and a cash flow reward every month.