After the variance is approved, you will need to get a building permit which may require plans review if it's an extensive addition.

The tenant applied for social service assistance, utility assistance, etc., and they never missed a rent payment. 

Did you include utilities into your calculation (water/sewer), lawn/snow removel, capX, and repairs into your rental budget? 

I made offers much lower than that when the repairs are extensive. 

If you pull comps and write your letter, the appraisal does not have to change his Opinion of Fair Market Value, however he should/has to within the report address why your sales were not utilized and or why they are not considered reasonable comparable alternatives.

These guys are RE investor tax preparer with extensive knowledge.

The repairs seem extensive including bad insulation, minor roof repairs, faulty structure, floors are uneven (home is a little over 100 years old) galvanized pipes, old water heaters, among other among issues. 

Now we're in a breach of contract, with only $3,500 deposit at stake on a $333,500 package.Gave an extension of 2 weeks to hammer out some type of deal agreeable to all parties involved.Cut 2 properties from the package ($160,000),  Buyers came back with half-down and Seller agreed to finance the other half for 1 year with guaranteed monthly income.The Buyers will have enough time to finish repairs, get all units occupied, obtain permanent financing, and everyone comes out a winner.Hard to make up 7 months of your life.

Most cities and counties have strict rules for parks, setbacks, utility connections, fences, parking, etc..  

@Michael BrunnerIn an SFH here in Madison and surrounding area, I would expect the tenant to pay all utilities (Heat, Electric, and Water).