Inherited a long term lease with a new purchase

[Tyler Ebnet]

In December we closed on a 6-plex that is in an area close to downtown that is currently being revitalized and is showing a lot of promise in becoming a really nice area for young families and young professionals.   When we bought the building it was in rough shape with a lot of neglected maintenance and questionable tenants.   We have been working at moving the questionable tenants out and are completely remodeling each unit.   It all seems like it has great potential, but we are struggling with one issue-- A lease that goes until July of 2020......  

We reviewed this lease with our lawyer during due diligence, and he said that it would be tough to get out of it through legal methods, but that we should try other methods.  

A couple of other notes on this lease:

1.  It is handwritten on a piece of notebook paper

2.   The rent is at $300 per month, of which the rest of the units are renting for $650 before even being redone

3.  The person on the lease does not live there.  She is subletting it to someone else and charging them the $650 per month

We thought we could live with this situation, but the people that are currently residing in there are deterring people from their interest in the property.   They smoke heavily in their unit, enough to the point that when they open the door the smoke comes rushing out to the hallway, they have odd people coming and going at odd times, and they scream at their kids and each other all the time to the point that people down the hall can hear it.   

We have tried to buy the person on the lease out, throwing a couple thousand at it, but she insists on getting $300 per month for the remainder of the lease.   We implemented a no smoking rule for the whole building, yet they continue to smoke, even with letters and notices.    

Any one have any creative ideas on how to deal with a situation like this?   Just curious if anyone else has run in to it.

Thanks for the help