There are 2 types of master policies, "all-in" or "bare walls-in".  

I barely knew my current roommates, or the other 4 we were going to live with, but luckily it worked out great.  

My thought is this: according to the rule of thumb advice on this website, the bare minimum rental investment you should look for is 1% monthly gross return on your purchase price.  

You don't just have to do bare minimum stuff to get it up to code using renovation financing, you can put in hardwood floors, new windows, etc.They will not let you add silly things that wont add value (giant unicorn statue in the front yard, etc), but if it's something a reasonably intelligent landlord would want to put in, it'll probably be ok to include it in the reno because things that increase rent tend to also be things that increase value.

My broker also requires me to use C.A.R. forms (I am having an attorney draft a bare bones purchase agreement and assignment agreement I would prefer to use).

This is so far to the opposite end of the spectrum from what I invest in that I barely feel qualified to even respond, LOL.

Now I know most new investors won't have that kind of cash avaliable, so at bare minimum, I would say have enough cash for the 6 months payment reserves.

IMO, the OP has no business trying to work his offer to accommodate the seller's supposed tax concerns when it's apparent he barely understands the basics of seller financing or capital gains.

It barely cash flows there.

$20,000 rehab happens in a blink of an eye, and that covers barely anything, if done right.