The ceiling was already that height when I purchase the home, I did add carpet and drywall around the area.

Financials-Credit Score: 750-800Non-retirement Savings: $30,000Real Estate Holdings-Aforementioned SFH purchased for $117,000 (4.25% interest rate).Recently sold comps ~$135,00-$150,000 (we put sweat equity into the house- new paint, DIY hardwood refinishing, replaced carpet)House is 3 bedroom, 1.5 bath rambler with double attached garage, patio, and attached 3 season room.

Cabinets in all properties are custom modern style cabinets, and all have quartz countertops, engineered wood in living areas, tile in baths and laundry, and carpet in bedrooms.  

You might offer to fix some things or add some things (ceiling fans, new AC, updated carpet) to make the tenant want to stay, but your deal should absolutely cash-flow with all expenses factored in. 

Needless to say, her vehicle was totaled and the bottom two units of the fourplex needed to have their carpets restored/replaced (in addition to other forms of cleaning in these units).

We have gotten 2 quotes so far.We have installed carpet at rentals before, as well as solid oak hardwood floors.  

Hes trying to charge us for full carpet replacement for issues that were only wear and tear due to age, and excessive cleaning charges and labor costs for things that were dirty or just as dirty as when we moved in.

A property that is sold "as is" could need a bit of paint and new carpet, or an entire gut and work on the foundation, plus a new roof. 

Things that initially come to my mind: who is going to select finishes (paint color, carpet color, etc), landscaping, no parking in the grass (we had one contractor get his truck stuck in a front yard, who is going to buy light fixtures (are you picking them out or the contractor) (we generally never leave those selections up to the contractor), tile selection, grout color, which pattern do you want for the tile (we had a guy run tiles the wrong direction before)This maybe more detail than you wanted but these are things we have forgotten in the past. 

@Blair Knowles -- Thanks for the response.As far as work on prop 1 -  some interior cosmetics, replacing/removing carpets and laminates, painting, etc -- not too worried about it.