I had the exact same problem a couple of years ago, and it is almost impossible to prove. 

I've been doing tons of research but I didn't find anything similar to our problem. A

Moving forward, I should probably try to use forgiving lease violations that aren't causing a problem as a carrot to get tenants off their existing lease and onto my lease.

CR has cracked down on building for many reason so being in a gray area could be a problem as I stated earlier make sure you are able to build meaning you have a water letter in hand and a Muni acceptance letter stating the zoning is ok to have a remodel and or build on you lot.  

My rationale is that if there's a problem with the materials, it is the contractor's problem as he/she/they were responsible for getting the material.

I learned that there are not many offers, may be the other buyers have the same problem as I have (just a feel good guess).My biggest problem is all nearby SFH are about 2k SQFT and not a real comp in terms of size and feature as the subject property is 5 bedroom and 4.5  bathroom.

IF, However, they now claim "Assistance Animal", you have a much bigger problem as you cannot refuse a legitimate request for accommodation for disability.

But, when you are looking for a first investment property and planning on a mortgage, you will often need to find the properties on the MLS, which is also not a problem as long as you know what you are targeting.

@Paul De Luca touched on DTI potentially becoming a problem as you try to scale.

I am in a similar position as the caller, so I am curious to find a solution to this problem as opposed to simply not buying real estate.