The numbers above reflect what I call "mandatory expenses," aka "things we have to pay or else we get in big trouble with someone else!"

See the image below.In declining markets, any market where appreciation and rent increase slower than the inflation rate, the rent today reflects property prices from 2 to 10 years ago.

I've been informed that the extent of validity of the purchase agreement has lapsed (45 days)  and an addendum must be added to reflect the new interest rate. 

Having the lease accurately reflect the current ownership will make any future written notices and/or legal action much cleaner and clearer. 

Occasionally I reflect on my goals, "sub-goals" and paths that lead to accomplishing them.

They could waste their time dealing with you when they could be spending productive time with a buyer that presents a valid offer commensurate with the subject's market price.1) The way out - Offer a price that is reflective of the market.2) As a broker, I'm surprised you would even ask that question. 3) Huh?

These expenses need to be factored in to your numbers even if they are not reflected on the seller's P&L.  

Yep sounds motivated, hope the price reflects that as well.

The commercial developers are all building Class A rental properties which that market is close to being overbuilt I believe and has the potential for saturation.As for my exit strategy, with these I am really building these for my own portfolio and as a template to do this in a few other areas of Houston I have identified where this should work.My construction costs are based on current market & trade prices for rental grade but as you said, these are all subject to market conditions and these numbers do not reflect a 10-12% contingency I add to the budget when doing new construction but I try and identify as best as I can a true to dollar, cost per sq. foot minus all fluff.

To the OP, your number one and two can be yes, it depends on how your structure your deals, you don't have to use your money.As to consideration, in RE contracts the good faith evidence and the value is reflected in the earnest money deposit more so than other types of contracts dealing in smaller values with personal property.