If you did the cleaning and repairs, you aren't going to be able to charge for your time. 

When I floated the idea of buying it from them myself, they said they were open to it if that's what I wanted to do and gave me time to think about it.

There are more listings to choose from now than any other time in nearly a decade.

Anytime the government tries to control prices, like they do with insurance in California, the market will react. 

Would we have to write it up to where they could reclaim the property, or try to convince them to continue the interest only payments for another year or two? 

If not down to 6%, where would you buy down to? 

My suggestion would be to cap your utilities at a certain amount and have Tenants pay anything over that amount.That will help you manage your expenses, and also allow Tenants to gage their usage each month, and make adjustments if they don't want to go over the allotted amount.As far as collection, provide the bill showing any overages and just have them pay for it along with their rent. 

If you get sued for Fair Housing discrimination, whether intentional or not, it's going to be expensive.

But I'm not sure how I would go about doing that (or creating an agreement like that), or even vetting people for it?

My commercial building in Knoxville is going to come in 3 months late and to me, I feel that is early.