Removal and examination after ceiling drywall removal revealed the water tracked along a joist and saturated the ceiling from a focal point along the joist.

Get rid of the kitchen before any discussions with the city...otherwise you risk revealing to them yourself that it was an inlaw unit!

Talking with them ahead of time before you purchase the property can reveal a lot about the situation.  

Some of the assumptions appear likely as 7 inspections out of 7 all revealing major issues is not impossible, but at best unlikely.The question really is the severity of the problems that the inspection revealed.

@Steven DeMarco, thank you for your open and honest reveal of the facts of your investment.  

A title search will reveal these as well as judgments. 

The Deloitte survey revealed the average family office principal age at 68 and 4/10 will endure a succession process within the next ten years. 

That search will reveal you are om title and have "Vested" interest in a property that you reside in that matches your Drivers license, income docs, etc.

Tanning Salon, small Chiro or Acupuncture shop, Insurance office, Lot of parking space and visibility. 

Additionally, local forums, Reddit, and Google Trends can reveal community interest and developments.