The Big plus is the tax deductions they will be able to take as well!!! 

This is also tax deductible.

It would/could be only 15% capital gains tax and yes you could/would deduct all selling costs including commissions and transfer taxes.

Option A would allow me to keep it as a long term rental .

Will the bank allow me to refinance the property again to tap into equity after the repairs and new appraisal?

I THINK you could probably just expense your deductible if insurance didn’t cover 100%.

The major pieces of information you are missing include NOI which includes deducting all of your operating expenses from your gross rents sans debt service, market dynamics (what are vacancy rates and asking rents like in the market the building is located in?)

You only want to file a claim if it's much greater than deductible or your rates shoot up pretty quickly. 

I'd deduct this before accounting for your total cash flow. 

Does anyone know of a dscr lender that will allow for seasoned money for a down payment and a really good property manager in Ohio specifically in Columbus, Cin, and Cleveland?