Past an initial conversation, how is this kind of deal structured?

I'm thinking of doing this conversion myself with hard money. 

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I want my children to have my same financial values, so I am involving them in conversations every day.My sister is a teacher, and time and again she comes up against parents who feel that everything should be taught in school, they spend zero time educating their children.

One thing I may do, is get a few quotes from contractors on roof conversion cost versus flat roof replacement.

Wish I had a better response for you but you might want to reach out the file manager who is handling your permit and ask what's the reason for some of these items, sometimes the counter clerks have a check list and end up sending the applicant ( you) that list without considering what you actually need.  

Very helpful - thank you @Craig Curelop and @Chris MasonIt looks like the lenders are baking taxes and insurance into the closing costs - as "prepaid items / reserves" - which amount to around $2000.The actual "closing costs" themselves amount to $5500 for a loan with 1 point - which includes title fees, state tax, processing, underwriting, appraisal fees, etc.Sounds like it can't hurt to do a bit more shopping but I definitely feel better that these costs are more in line with what's to be expected.

I do not say this from statistics but from conversations with other real estate investors.

I called the tenant and we had a conversation and she understands she is legally bound to the lease, she is also aware of the clause in the lease that states should the lease be broken there will be a financial penalty.

The roof caved in on a mud room, home owners insurance covered the exterior and the renters insurance covered damage to items on the interior.Hope that helps,Chris Pre