In your offer, you should request the ability to perform an inspection (you should hire an inspector, but also walk through the place and inspect it yourself), request copies of all contracts pertaining to the property (leases, service contracts like pest control, etc.), and request estoppels signed by the tenants. 

I usually connect my investors with my contractor or inspector to walk through the property so that everything can be sorted out in one go, or I have my clients make an offer subject to a walkthrough, allowing us to get the ball rolling.

Section 8 standards in our area are high (depending on the inspector). 

@Nam PhamHire a third party inspector.

The code inspector has been receptive.

Every day they should call their case manager, an inspector and a supervisor to advise them how important is that the unit is approved so they can be authorized to move in.

I feel like I need to get a licensed home inspector in there too to check things out that I might not be seeing...

No not necessarily, I do work with greystone as their home inspector.

Also, the inspectors are TERRIBLE, Sorry but your purchase of all in 350k was a very bad investment, not trying to knock you even further down.

---You could offer to let them out of the lease---Refund the cost of the test---Spend up to $x to address the issueYou should explore the consequences/expectations before agreeing to anything else.Second, allow them to get a test done by an inspector you approve.