That's why most apartment buildings include water in the rent.

The guru your son is learning this technique from is likely not telling your son that the deal will almost certainly encourage your son to get an "off-market" deal from a "wholesaler" who is unlikely to properly disclose the details of the property or encourage an inspection. 

I have been filling my pipeline for the past 4 months but everything thus far has fell apart.

And be sure that your offer can be rescinded upon inspection.  

I’ve already put down a $2,000 earnest deposit and paid for the inspection and appraisal.This event is unprecedented in the area, as the area is typically low in violence and considered very safe.

I've done and been a part of many Chicago zoning changes...they take a very long time and a lot of upfront money...unless you are planning to add multiple units and do a full renovation, the ROI is probably not there.

The #1 reason that Landlords fail, according to the American Apartment Owners' Association, is the landlord's failure to manage to the lease.  

We also paid for an inspection on the house & 2 appraisal fees.I called Nick to ask questions and he didn’t like the questions I was asking so called my partner and told him I needed to back off or they’d cancel the deal!

We're still waiting for the PM company to provide an inspection report on the setout & a rehab estimate for the turn.

Context matters: for some apartment buildings that compete head to head with a very similar property just down the street, this may be a good strategy.We rent premium single family homes and I have never offered an incentive.