Based on what you've described, this sounds like moisture on the surface of the wall, which would be caused by excess moisture in those areas from the Tenant not ventilating the bathroom while showering or cooking with a lot of steam in the kitchen area.A contractor can put a moisture meter in the sheet rock and quickly tell if there is any moisture inside.

The next 6-12 months could be a gigantic opportunity to find deals as people that did not follow a conservative plan (like you described above) may rush to the exits and sell properties that would be great in the right hands. 

You are probably correct that you are not a priority for the PM since you only have 2 units--and because of this, they may not care if you fire them (they may even be happy about it if your portfolio isn't making them an ROI that they like)...unfortunately, you'll likely run into these exact same issues with other PMs, so I'd suggest first talking with the PM to see if you can work it out--and even if you can't work it out, try to make that discussion one that provides you with plenty of info that you can use if you have to hire and manage a new PM.Although this is not my area of expertise, I would think that there must be ways to incentivize the PM in these types of scenarios...perhaps some folks on here who have more experience with PMs can describe some strategies to help align the priorities of the owner with the priorities of the PM.Good luck out there!

What you described is more along the lines of them buying the property from you on a Land Contract.

In the situation you described in your OP ($1,500/month rent, 70/30 split, requiring 3x monthly rent in income) then yes, you would need to confirm that the tenant has a monthly income of at least $1,350.Good luck!

Pinker's message definitely aligns with what you described regarding the "then vs. now" debate...as Billy Joel sang: "the good old days weren't always good!"   

To restate your plan in accordance with IRS regulations, complete the steps described in your restatement instructions by July 31, 2022.

Typically Cash for Keys as your friends have described has been very helpful to make them move out as quickly and smoothly as possible.

I've been really lax on performing much of the DD you describe.

The type of adaptive reuse project you are describing might take months or years to plan depending on how busy your engineers, planners, zoning attorneys,  and general contractors are in your market.