You need to explain that they can get what they want for their property if they are willing to spend 30k in rehab cost and pay 6% to an agent to sell the property.  

All the other houses with water issues can be explained by poor grading.

I should have explained my question better - my dilemma was more about how much rent to charge the tenant.

I personally focus just outside of the hyped up HOT areas; I'm in it for the long run and can make money without chasing the shinny object/area of the minute.  

I explained I would present an analysis outlining the ARV with the expected rehabber profit and that I will expect to see proof of funds before I would show my list of cash buyers this deal.His response; he wanted to do a separate walk through of the property before making a decision.

But I think they explain it better than I can.

While we are with them we ask about their employment and if they receive any other funds and explain in detail our expectations.

I trust you explained you do not allow tenants to make modifications of any kind to the rental unit without the explicit written authorization of the landlord. 

He is a good teacher and patient about explaining the ins and outs over and over. 

He kept insisting and explained that they drove from a few hours away just for this open house.