I conduct my inspection as to the condition it was given to them and take deductions off of there security deposit based on repairs or replacement of items.  

Hi All, I am doing huge demo and remodel on my house and we are replacing everything.

I agree with @Kenneth Mooney you should be able to replace a furnace, leaky roof, etc. without worrying about defaulting.

@Marco MorkousIt's not used too often because it makes the house less desirable to buyers, but it is basically a contingency for the seller to find a suitable replacement home ranging from 30-60 days. 

Demolition entrance porch and bathroom ( including block supporting structure (steps will remain on (do not demo)) - replace with wood to support structure and if absolutely necessary use block if needed but minimize cost here as well.Construct gable roof structure to replace bathroom and porch to meet minimum size requirements for bathroom - adjust the entrance way to bathroom only to minimum requirementsRoof must be metalAll new electrical and plumbing beneath ( I have an electrician who I have contracted to do teh whole unit)Provide the bare minimum cost kitchen counter and cabinets including sink if needed.

Roof replaced in 2004.

There's a clause that says it can't be used for physical repairs which makes sense if you have a brick and mortgage store/office but in our case as rental property owners, can I use the loan funds for a repair such as a gutter replacement??? 

The benchmark to replace my income is $350/day, 5 days a week.

But if I billed at a break-even rate (say $50), the owner would freak out because we charged her $50 to replace a toilet flapper. 

Did a complete gut rehab of the master bathroom down to the replacement of the subfloor, did a kitchen rehab by repainting the cabinets, adding new countertop, new backslpash and new appliances, new fixtures, repainted the entire house, added new floor to the basement living area.