Everything about this home was great except for the shower was a wreck, it was filthy, and kitchen is dated but the shower made it unable to get a typical loan FHA or otherwise.

I was talking to him last week and I believe he said he has a 3F in Providence and is AirBnB-ing one of the floors and doing the other two with a long term tenant.Actually now that I type that out, I have a second person with a similar situation, except in a 2F - renting one out long term and doing AirBnB with the other.

Except I buy fixer uppers and live in those while fixing them up. 

They had all the sizes I needed in stock except for one small odd-sized unit. 

Is this normal or should I negotiate that this fee be waived or changed to a standard earnest money deposit that would be refundable under certain circumstances? 

The nice thing about buying a detached house in the 400-500k range is that you will find that they have similar amenities as the new builds except more space and a higher likelihood of cash flowing. 

We are sort of similar to Detroits market except ours I would say is more thriving even though I'm sure I'm a little biased.

Consultants, inspectors, and mentorsProperty managersAssistantsBookkeepers, accountants, and attorneysLandlords if you rent your office spaceYour business partners if you paid them (except if they were strictly lenders)Disclaimer about wholesalers: it is a controversial issue, with some of my colleagues claiming that wholesalers do not need 1099s.

There is open land in every direction except for the tower.

Yes, with the exception of REO/Auction properties.