For payment, do not accept cash. 

We're definitely testing the waters with this house first.

If they can't/won't accept the increase, they'll move on and you'll find someone else.I don't play around with incremental rent increases stretched out over time.

The issue is this: the property could be acquired and rehabbed with a basis of $175K-$200K (assuming my offer is accepted or negotiated up a bit).

Lots of owners are small franchisees of a brand and they fee them a lot on testing splits for money to head corporate.

Most lender will discount the rental income sometimes accepting 70% or 75% of the net income. 

So there is always risk, that you must accept if you want to invest in real estate just minimize it as best you can.

.#8-Avoid any Private Money Lender who balks at being vetted, investigated or who wants you to simply accept their word with a handshake, a smile, a reassuring phone call or a calming email.

I was reading through the WI Landlord-Tenant guidelines and saw this (ATCP 134.04(1)) "The landlord must identify an owner of the premises or a person authorized to accept legal papers on behalf of the owner.

Rents are one way to price a property but if you plan to accept any offers with a loan Comparables are what matters.