Which means the burden of proof can be high.  

I don't think a bank letterhead is necessarily required... but I would imagine this lender would submit a proof of funds that appears to credibly represent their available cash.

It sounds like your current situation and rapid loan paydown is proof of you successfully executing that strategy. 

Do you know Real Estate Cycles?

Once I got it under contract, I would want to see the leases and if perhaps even deposit slips or proof that the rent was paid.

I think we may be at the top of a RE cycle and price appreciation may be flat (at best) and falling drastically (at worse).

If it is under-assessed now, and a sale is recorded at a higher amount, the auditor will raise the assessed value accordingly on the next update, which occurs on a triennial cycle (we're in year 3 of the current cycle now).

I stopped at the special needs station and switched out my cycling shoes and pedals for running sneakers and flat pedals.

So far Im enjoying this flip project and the process of building from ground up... but Im also realizing that flipping may not be sustainable and is much riskier this late in the cycle.

Also do you have pictures/ proof that the unit was damaged and that the damages would be equal to or exceeded the amount withheld?