The more states that you are willing to buy in, the greater the pool you get to pick from.Generally, notes with properties that are in states that have longer timelines to foreclose will have greater discounts to account for the greater risk and longer time commitment.

In my specific case, the tenants pay electricity & gas, but the previous owners were paying for water.

If the seller is offering zero compensation, that property could be out of budget from inception or drastically reduce the seller's potential buying pool as initially it might appear out of the buyer's budget or feasibility if required to compensate their side directly. 

There is demand for this, the market you are in dictates what your rental pool looks like.

Demoed the whole house except one wall added 3 extra bedrooms 2 bathrooms customer fixers raised ceilings a pool and many more details.

Anyone else hear of passed legislation mandating the property managers in addition to property owners are now responsible financially for any repairs not done on properties, taxes not paid and rental certs not submitted/paid for, lead based paint fees/apps and required work, HVAC certs every year and proof utilities (water/sewer) as paid, and general compliance matters?   

We deal with a lot of shared water and electric.

Turn water off2.

PLUMBING expansion tanks for hot water heaters, copper scabbed into galvanized pipe and proper venting HVAC - sealed duct work and properly sized for sf.

(A) For an accessory dwelling unit described in subparagraph (A) of paragraph (1) of subdivision (e), a local agency, special district, or water corporation shall not require the applicant to install a new or separate utility connection directly between the accessory dwelling unit and the utility or impose a related connection fee or capacity charge, unless the accessory dwelling unit was constructed with a new single-family dwelling. home."