Is the tenant being compensated for his PM functions?

When contractors charge more it is usually for these reasons in my experience talking to RE investors:They do quality work and deserve to be compensated more.They don't really like working with the owner and throw out a price that is 100% worth their while.They charge 1 rate for everything they do. 

One coarse of action could be hiring subs that pull their own permits and have required liability and workman compensation insurances.

If you don't have access to it I would suggest you try and buddy up with a investor friendly agent who your willing to compensate for assistance.  

If the spread will be higher after the addition you must decide whether that is fair compensation for your time and to take the risk that the market changes against you during the construction period (prices can soften, interest rates can rise, etc.).

Law dictates that brokers can only get a total compensation of up to 5% of the loan amount - aka $2,500.00 on a 50k loan.

I insisted that I would drop the price a $1,000 to compensate for the gas line.

They are taking a risk and deserve to be well compensated.

He'd like to purchase it as a rental, and my compensation will depend on how far under 55k I can convince the seller to go.This is my first negotiation, and I sense she's motivated.

I was able to increase my rents enough to compensate for snafu's.