The big-ticket items had already been completed (new roof, HVAC) and as first-time homebuyers, this "project" was more digestible than others we had seen.

We can also add back in depreciation and a few other items you may have written off. 

Meaning that banks have to invest in any income kind of communities(low, middle, high ) ( big banks of course are not doing it and are covering themselves by with "donations").

If I start having to dig into walls and the sub - floor I will almost automatically put an extra 5-10% in rehab costs for unexpected items since that is when you will typically find something that would be better addressed now rather than later. 

When you get the title report, during escrow, you review it and let the escrow/title company know which exceptions/items on Schedule B that you are objecting to (which usually buyers are just objecting to any monetary liens, and unpaid taxes), meaning you are saying they need to be cleared prior to close. 

Due to item 1, adding an ADU can require years to start achieving any return (once the accumulated cash flow recovers the initial negative position).4) Adding an ADU is a slow process.

@Kenny Simpson Pre pays protect the lender and is a line item that is keeping the lending world in business.

Items like vacancy, future maintenance reserves, etc. can be variable along with your mortgage numbers depending on what financing you obtain. 

A few days later we met again went over some items in the inspection report.

You said a basic item like the toilet was dirty when you go stay yourself.