I'm guessing that no matter what in a Class C property that a tenant will most likely put a lot of wear and tear on each unit that will not be covered by a security deposit alone.

We currently have our eye on a tear down sitting on less than about 7,000 square feet of waterfront land.I'm curious if anyone has experience with the shoreline certification process and pulling permits to build waterfront.

Making sure you have the permits and that the building is up to code, otherwise when you plan to sell a new buyer may have to tear out the old work to meet their financing terms. 

Management should get off their sorry rear ends now and begin the process of attempting to find a replacement tenant with the hoped for goal of a new lease starting in January 1st, 2018.If a new tenant is found sooner (and a lease is started on, say December 10th) and there is no damage above normal wear and tear to the rental unit then management would need to return the difference in rent back to the original (now departed) tenant (minus any expenses for advertising the unit to get it re-rented).The entire point is that it is totally untrue that the rental unit has to remain empty for the remainder of the lease while property management sits around doing nothing.Gail

For instance, we make it clear to tenants up front that we don't charge for day-to-day wear and tear, including broken dishes, etc.

You are calling this "value add" but from your description, you would tear the houses down, so this is a development project.

Sometimes I do complete tear downs and rebuilds and other times I do gut renovations and/or additions (depending on what the situation calls for). 

How about wear and tear on the property vs. a long term tenant.  

Just like owning a bunch of little rentals without plumbing, wear and tear of tenants.

., tear out to studs) to be livable by lower middle class standards.