Paint helps protect both the interior and exterior walls, chipped or flaking paint can allow elements into the wall to cause damage. 

The water was running along the wall's interior framing, and there was no exterior evidence until the water pooled in the upper corner of the living room and continued down the wall.You mentioned reported wetness after a rain. 

Then we can use national building codes instead of every locality putting a spin on stuff.Look at pre-fab housing, you only need a state cert on the interiors and the time to put those projects together is <50% of running to BDS (in Portland) and hoping you can get thru quick and not run afoul of neighborhood associations.Yes, neighborhood associations serve a purpose, but their main agenda is to freeze everything once they buy a house in the neighborhood.All I have to say is I've taken 6 out-of-state builders to BDS for a pre-app and I'm batting 1.000 - They all walked away.

With respect to the rehab cost; I simply guessed and used a $5000 estimate, since I couldn't see the interior and it looks well maintained on the outside.So assuming those number are correct I thought that we'd get a reasonable result. 

I am also pursing a minor in Economics, and certificates in International Business & Data Analytics.

Have you considered smaller markets in the north or interior (or investing out of province)? 

The rent on the ADU would far exceed the 1% rule.I had a property under contract as Covid hit that we pulled out of during DD (not due to covid) that I had allocated $275k to $300K mostly hands off for the ADU construction (3/2 with garage and high end interior with small amount of hardscape) that I believe would have rented for ~$3.5 to $3.7K. 

Neither is the iconic international city, stanford university and berkeley, as well as strict supply constraints. 

I would probably pay him cash for his services, because hopefully market rent will rise and you don't want to be stuck with a tenant legally paying X amount of money under market value because of a deal you made at the beginning when they painted the interior that one time.

So I am going to ask for HUGE credit, as BOTH structures need new roofs as does the carport ($17K), the interior of the house pretty much needs a gut, and to bring the property up to rental standard with horses will cost me about $39,000.