The ONLY reason we were able to renovate for $6k is because I am formerly a painter and was able to repaint everything and learned how to tile and install the flooring along the way.

You may need to cut into the ceiling below which means you will have to take care of patching the hole and repainting the area once the plumbing is fixed. 

The way this should work goes like this.... 1) notice plumbing issue. 2) cut open ceiling and investigate.  3) find problem. 4) fix problem(s). 5) replace damaged sheetrock with a new undamaged piece. 6) after mud and tape, match existing popcorn or texture to what currently exists now on rest of ceiling unless it is a smooth finish. 7) if it's smooth finish or textured then prime and repaint ceiling. 8) done!

I than plan on renting them out to section 8 tenants and I'm not worried about them trashing the place, even if I had to repaint the place and change the carpet every turnover, it wouldn't bother me.

Ask them to show you around their house and point out things that you like, and things that you see they need to fix (ex. scuff marks all over the walls... so repaint).So interest in them and their house!

The PM recently had me repaint the interior of one of my properties, a 1500 sq ft house and told me the cost was $3,500.  

@Garrett Beecher I am redoing the tile in the bathroom and kitchen, new sinks, repainting, possibly new carpet, and patching up some walls.

Put int $35k to redo kitchen 2 baths, repaint and flooring.  

Covering it with a thin sheet of sheetrock is preferable, then it can never be an issue in the future, but usually we just repair and repaint to save the customer money. 

It's really no different than refinishing existing flooring or repainting, replacing a broken window, or buying a new washing machine when the existing one dies.Now if you were to do something like upgrade to hardwood floors from carpet, that might be a different story.