Understanding debt component is vital to deal-making as it will provide you with the confidence in your financing to give the seller assurance you can close the deal. 

Should I draft a lease specific to garage/shop space or just use my standard residential lease with a few modifications. 

Seems like you started prioritizing and that will be vital going forward.

The buyers entered the property (without permission) and made major modifications to the house(before closing) ie. taking down walls, doors, stealing tools from the garage.

So they went ahead and made modifications to your property without permission?

As for the elaboration, I went through some financial struggles in my career (fossil fuel) a few years back and was forced to do a mortgage modification.

So it's vital you have an investor minded agent on the ground who can help you make a good buying decision.

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If the owner is deceased check the vitals statistics dept and request the death certificate.

On a side note, did you ask for proof that electrical modifications were done by a licensed electrician?