Since the deal already was going through the primary offer process, we waived all contingencies including appraisal, financing, inspection, and any other extra tests like LBP and radon.

I can schedule a meeting with my CPA at just about anytime (without all those extra nitpicking fees) and throughout an hour call we'll just discuss random laws, taxes, experiences, etc for half the time while still making sure business is discussed and we take care of what's needed. 

I think if I was further down the line and more comfortable with an area/the process/my numbers game then I might average it out/compensate the cash flow over other deals and put the extra back in the process.

As you go up in price rents detach somewhat from the 1% standard, but you pick up a little extra principal pay down and perhaps also appreciation potential. 

It's a flat 2 points for 6 month extension there isn't a monthly extension fee such that you pay extra each month?

Perhaps with the extra time, you may find something wrong that you can use to reduce the price.You may be in a better place than you think you are.

Here are the inputs:Purchase Price: $400-450K per propertyDownpayment + Closing Costs: $90-100K per propertyMortgage Payment: $2,000 - $2,200/month assuming $2K/year taxes and $1.5K/year insuranceTotal Monthly Rental Income renting out all the rooms (6 bedrooms x $700 rent per room on avg): $4,200Total Monthly Rental Income renting out all the top rooms (3 x 700) and renting the bottom unit to a family ($1,700): $3,800Total Net Rental Income Before Utilities/Maintenance/Reserves/Capex:  Low: $1,600, High: $2,000Utilities: ~$400 assuming that you pay for everything, internet, heat, electric, gas, water, storm drainageMaintenance/Reserves/Capex: $400 to have enough to cover any items that could need repair, maintenance, etc and accounting for age of house and more wear and tear Total Net Cash Flow Per Month: Low: $800/month High: $1,200/month, Middle: $1,000/monthAlso, I didn't include you adding any extra rental income for for adding utilities to rent/garage spots rent/etc, so these cash flow numbers are very conservative but realistic. 

I also gave them some extra money to cover the hotel costs as a show of goodwill- but the law in VA says I only have to prorate the rent.

Cost will depend on a lot of factors: size of the units, how many head units are needed, how well air sealed and insulated they are, window placement and efficiency, difficulty of electrical and running the lines.

Make them think you might spend the extra 40k on rehabbing , money you don't want to spend interest on, whatever.