A buyer put an offer in at a relatively good price after spending significant time with the seller and indicating how he planned to improve and personally run the business after purchase.

Buy out the properties mortgages and sell it for a loss and try to minimize the total loss?

Quote from @Steven Gesis:  Important takeaway is due diligence review, not only deal level but sponsor track record - yes, past performance is not indicative of future results, but at least it's a metric to review.   

This step should be done carefully, with legal advice, to minimize the risk of triggering the Due on Sale Clause.Monitor the Loan: Ensure timely mortgage payments to avoid drawing attention from the lender.Legal Support: Have an attorney review all documents and agreements to ensure compliance with local laws and mortgage terms.The Due on Sale Clause is a critical tool for lenders to protect their financial interests, manage risk, and maintain the quality of their loan portfolio.

Start by examining population growth, as cities or neighborhoods with steady increases in residents indicate a thriving area with potential renters. 

It "can" indicate a certain financially disciplined person, but there is a reason DTI determines a mortgage and if it's good enough for the bank, well why wouldn't it be smart for the landlord too? 

If you would like me to obtain a quote for replacement, please indicate your desire to pay the cost of the replacement and we will obtain bids.

I would choose Candidate #2 providing you have acceptable verification of their income - bank statements that multiply out to what the past couple years tax returns indicate on the business.

The goal would be to have this cover or at least minimize the negative cash flow.

Eric is correct on the minimal cost with above average durability.