The house needs a really bad painting job which owner had a bid $3500 to repaint whole house and trims. 

I would repaint it before preplacing it. 

If the wall dries up have a contractor repair the drywall if necessary and repaint the wall 

B is separately metered for all utilities.Rents on turnover would probably be about $3k/month for the 3/1 units and $1800 or so for the cottage.I would budget $50k in renovation expenses over the next 1-5 years to include: termite treatment and repairs, exterior wood repairs and repainting, new roofs, minor interior rent ready activities.When I run the numbers at current rents, I get a 5.9% cap and 12.5 GRM.Current rents from A&B should cover a first mortgage and property taxes.  

Tell the seller you want every wall opened up for damage inspection,a full extermination procedure,a through cleaning of every surface,and complete repainting of the interior.

Rather granite kitchen with SS appliances, some repainting, new carpets and a few other details and this property would be great to get on the market to sell or even rent it out for a nice 1200k+ cash flow.There was much debate on whether to rent or flip the property.  

Some other i think have or are trying to get lucky, bought a house in november/december, repainted it & trying to sel for $50k more.

then you could fix the crack lines and re paint or carpet... but it does seem the problem stems from the flat backyard and the downspouts are eroding or settling your soil under the slab...I think the general building dept. code is to have positive drainage for 6feet from your structure to get water away.. just a good guideline to keep in mind for drainage.

If that realtor thought that you repainting and putting in new carpet would sell the place faster, I'm sure they would suggest it.

You need a professional to come to the home and determine the extent of the damage.The entire home may need to be redone depending on what caused that damage in the first place.Plus you're gonna have to repaint the entire exterior to match the new siding.