I’m buying a house that was use as 4 families but on the certificate of occupancy said that it’s only a 2 families, now the city of Newark wants me to eliminate the other 2 apartments which I understand that they are totally ilegal because one is located on the basement and another one is the attic.

That eliminates some of the confrontation and awkward situations when you have to tell them something they don't want to hear (the company made the decision, not me). 

I have not been getting any responses through Craigslist, especially because the contact phone number is "encryted" (wrriten-out) to eliminate SPAM and SCAMS.So,  my questions are:Should I be using a different rental approach?

If you pay off the one with the lowest balance first, you hit the trifecta:  1)  You eliminate the debt, 2) you eliminate the monthly payment on that debt, and 3)  you then free up the payment you were paying in #2 to pay on the next lowest balance debt faster...and pay that off and get the same impact on the next lowest debt...and so on.Do it this way, and you will pay off all of your debt faster than you can blink an eye.

PM looking to not rent to him, so choose what he thought was a way to eliminate him by creating a financial barrier. 

If they were to eliminate that 30k increase in assessment completely, then you save $840 and they would invoice $336.

They had tried all possible methods, but none of the methods were able to eliminate the fleas.

There are lots of no income verification options out there to eliminate the debt ratio problem, but you'll need at least 25% down.As an aside, that's a lot of leverage. 

This is an issue because I was looking to setup a LP with myself as general partner and him as a limited partner and keep his name off the title, thus eliminating his liability, but this is preventing me from doing so. 

Eliminate the mother entirely from the scenario.