$210k bid to replace 2-inch galvanized main across 55 lots. How does that come off the price?

Show your lender the bid. If they find it later, at the appraisal or at the site visit, you lose credibility on everything else in the file and they may escrow more than $210k. If you bring it in yourself with two contractor quotes and a plan, you're the borrower who knows his asset.

Run it as a value question rather than a negotiation question. Your lot rent gap is $110 a month across 51 occupied lots, so about $67k a year of gross upside, call it $58k of NOI after the expense load on incremental rent. At a 6.5% cap that's roughly $900k of value creation over however long the rent moves take. Against that, $210k of pipe is real but it's not the deal.

So the pipe isn't a reason to walk. It's a reason to make sure the money exists at the moment the pipe fails, and failure timing is the thing you can't control. My underwriting would carry the full $210k as a year one to year three capital item funded from reserves, and I'd size the reserve at closing rather than hoping cash flow covers it.

On the ask: full number off the price is the cleanest thing to request and you'll probably get somewhere between a third and half of it if the seller has other interest. If he'd rather hold price, an extended interest-only period is worth something real, and you can price that. Take the monthly principal you'd otherwise pay for 24 months and see whether it's within shouting distance of $210k. If it is, that's not a worse deal, and in my experience sellers guard headline price more stubbornly than they guard terms.

Either version still rests on how fast you get to $465. If the rent moves take five years because of notice requirements or local pushback, the pipe gets funded out of your equity.

42 psi at the far end with rust in the samples reads worse to me than "maybe five years." Galvanized fails by narrowing until the far run is unusable, and it doesn't announce itself. If two homes at the end are already seeing rust, I'd assume two years and structure accordingly.

Do you have to do all 55 at once? Reading @kestrel, a phased job that replaces the far run first and buys you information about the rest of the pipe seems like it might be cheaper than one $210k mobilization, though I'd guess boring gets cheaper per foot the more you do in one go. That's exactly the kind of thing you'd know and I wouldn't.