He says that this property should be easily sold between 200 to 225K.I asked him that some comps are around 140K and he mentioned that we will do some high end rehab with some modifications(adding extra bed room) which should give an ARV ~225K.

Part will depend on the price range you're buying and selling....under $200k they're earning their money....under $100k, you need to pay me extra, no matter how many you do.  

Now, SQUEEZE $200k out of that extra $100k!

Just for some extra money to later invest?

He required a $5,000 deposit and then a higher monthly payment with the "extra" applied to buying down the purchase price.If the buyer defaulted, he would keep the $5,000 deposit and he had the monthly payment that was higher than it would rent for.

We don't know your numbers, so can't say if it is worth it, but it probably isn't worth an extra $50K/unit, if it's an extra $50K spread across all 8 units...maybe.

Is there a way to figure out how much extra people charge for average properties in a good location vs  average location?

Then study up on BP and elsewhere about some basic landlording processes (like screening tenants, etc)...When you sell it in a few years, then be a perfectionist to get it in show condition with new counter tops, appliances and floors to wow would be buyers... truth be told, if you replace these now, a few years of wear and tear by renters may mean you'd just have to redo it anyway to get perfect sale condition down the road...

I recieved a judgement for 1400$ due march 31st and tenant leaves in 7 days or gets evicted with the verbal agreement she would sign a payment plan and leave the unit clean for giving her extra time as she had no where to go.

Now, I want security, independence, and some extra money would be nice.