Don't worry about the inside/outside non-permit deal - that is something that could likely be done in a few days, and unless you are blatantly constructing (like a second floor addition) semi-long-term, the city probably won't notice.

.,  a title company may request additional information from previous owners. 

Normally if a client already owns a flagged hotel it would be some what easy to provide funding to buy an additional location.

What is common practice in that area? 

While doing my research I have noticed that a common theme for most first-time investors is that your first deal is typically the hardest, but, after the first, the rest come easily. 

And find a partner that share a common vision and purpose.2) Get clear on your values.

Then if the project sells in 10-months which is not uncommon in my market where permits can take way too long, you pay an addition 4 pts in extension fees.

Does anyone know if this price is usually a baseline and they are likely to receive more than their asking price or if it is common to offer a lower amount based on repairs needed?

Because he had a mortgage of $6k/mth and a car note of $2k/mth...in addition to his other household expenses. 

For pretty houses a 3-10% option fee is reasonable with 3-5% being most common.