So I ask what if the county says no, need further modification.

I would suggest checking with your Planning & Zoning office to find out what modifications you might need to make because of Fire Code, ADA, etc. 

Is that a silent second mortgage from a prior loan modification?

If a modification needs to be made following the inspection, he should correct that.

Situations like these arise quite often in condosWater penetration through failing stucco on several units necessitated a larger stucco and facade replacement in my case.

If it’s just the furnace that needs to be replaced that will obviously be less expensive than if you need duct modifications or air conditioning replacement as well.

Anything you do beyond that is set up for being taken to court.If you want to know if any of the tenants have special needs then I recommend you develop a pre-screen questionnaire or a pre-move-in questionnaire where one of the questions could be whether there any special needs or modifications needed. 

Are there any modifications to the written lease?

Either of these systems are likely to have multiple old repairs and modifications, which are/will become more frequently needed going forward.Assume that subfloors/joists in the vicinity of kitchen sinks, bathroom fixtures will be significantly deteriorated.Virtually guaranteed you will have asbestos containing materials that will need to be remediated, as well as quite likely lead based paint in some areas.Odds are, the existing Tenants are very long term, under market, with fair to poor conditions.

However, they did discover that the wood frame beneath my toilet has become rotten, necessitating its replacement.