If this is something you regularly encounter with new tenants, I would recommend getting a checklist lined up for lease signing walkthrough so you can make sure all your points are covered before the keys are even handed over.   

Second, you need to cover a wide territory with minimum time so don't waste too much time on unmotivated sellers.

The criteria selection is extensive however depending on your County I’ve found that some of the criteria isn’t covered in the records so when searching it fails to result any.

The sellers want to stay in the property for an unspecified time and will pay $450/month in rent and will cover any an all repairs with everything on the property.

You wouldn't be covered on his renters policy. 

His rent covers most of the PITI and my wife and I cover the rest (+ extra for Maint, Vacancy, and Capex).

Buy, Rehab, Rent, Refinance, Re-Sell, and RepeatThe idea being: you buy the property and fix it up, then rent it out to cover holding costs, re-finance to a conventional loan (if you used hard money etc. for the original loan), then resell the property after the year lease is up.

If you want to make some assumptions about the long term future state, and you plan on holding a LONG time (10+ years), then I suggest you look at historical pricing and rents to determine average appreciation rates over the last 10, 20, 30 years which would cover several boom/bust cycles.

By about 3% per year, which your tenants are covering if you are increasing rent by on average at least 3% per year.

Yes, I realize it's much easier to just hire contractors who carry liability and worker's comp, and we're doing this for much of the work, but for smaller projects/day laborers, I'd like to have our own worker's comp even if it means everyone we're covering then becomes an employee (with payroll tax, etc).