We have our eyes set on a vacant office building that has had some flood damage.

Other contractors that attend meetings and a ton of vendors at most monthly MAREI meetings that have their own list of referrable contractors - but most of these Vendors are not on BP, so you can't get any input from there here.For example - we have 7 different hard money lenders with a huge list of vendors they refer, 2 Title companies, a Cabinet Flooring Guy, 3 Property Managers, several wholesalers, and some companies that specialize in water and other damaged homes.Hope to see you at a future MAREI meeting.

It also has loose/damaged siding, security bars on windows that need to be removed, earth-to-wood contact in the foundation and siding, leaks in sinks, windows that don't stay open, loose toilets.

Also, was it the original damage deposit amount? 

The issue is it needs gutted , It has water damaged where plumbing line burst and house was vacant at the time.

I've had better luck representing myself buying AND selling real estate than working with these jokers.The house had major foundation damage and a rotting roof sheathing as well as asbestos and electrical issues.

As for bad tenants, if they pay the rent you just deal with it and see if there's a way to get them out.If they don't pay rent, you go through with the eviction process and just deal with all the hurdles of the LTB.If you can hold the property for 6-12 months without any rent and have a bit of cash set away for incidentals, legal, intentional damage etc... it will never be too big of a deal.

If the tenant did not report the damage to you immediately, I would say they are as much at fault as "whoever" may have done it. 

We originally decided to no longer accept Section 8 because of damage at properties that we purchased with Section 8 tenants inherited from the previous owners. 

Therefore a slow leak that could have been repaired easily just turned into expensive water damage, mold, restoration work, vacancy, etc. and good luck getting the tenant to pay for all that even if it is their fault and no matter what your lease says.