We need to ensure that residents are not negatively impacted when selling properties.

Unless you want to start selling real estate for a career, there is no need for it.

If you can have better cashflow then sell.

Most lenders sell their loans out.Nobody wants a loan where the asset is underwater every month.The real question is, why is a property worth over $1M only producing $4,000/mo.You should consider raising rents as this seems significantly below market.

One day he calls me and says he and his wife want to sell a building they own and they thought of me. 

We have record employment, all of our retail is booming, housing is still selling.

If it’s in California they will chase you for state income tax if you ever sell your new property, even if you exchange out of state. 

If it's not selling, you need to lower the price.

If so, you can't really pivot to short-term rentals there and have to capitalize on the inn vibe and in-house services.My major question is why is the current owner, who bought it after it sat vacant for twenty years, looking to sell you the problem they can't fix?

My advice would be fix the dog, and sell the puppies or adopt them out to a good home.