The vanities were in bad shape, so we have already bought some upgraded vanities with real marble* tops and new faucets, but not sure if we should also do a major remodel to replace the dated 1980's floor and wall tile, "Roman" whirlpool tub ("bone" colored), "bone" colored toilet, and acrylic shower stall.

NEVER AGAIN, but I have learned a lot & massaging them is akin to poking a sleeping dragon.

You have the right to refuse to rent to people who you refuse to make their intentions clear, or refuse to people who change their story.We've had several situations exactly like the one you described where a restaurant owner rented an apartment for employees and we've have a few where massage parlor owners were using our apartments for prostitution and we had serious problems every time.I would not go as far as taking the rental off the market, but you may feel better documenting every conversation, text message and picture.

Early on I started out with a 20 unit multiple property C-class seller financed deal and it almost bankrupt me as I didn't do my analysis correctly.It's great that the seller is willing to hold paper but be sure you aren't massaging the numbers to create a better deal than what's really there and be especially certain you have sufficient cash reserves to tackle a project of that size even if it's 100% financed.  

I am sure he probably still needs to massage the numbers a bit but better than excel spreadsheets and a box of receipts.

Niagara Massager shower head.  

From there you can either install an acrylic surround as some have suggested (less expensive, but cheaper looking), or you can install new backerboard/waterproofing/tile.You might have mechanical, plumbing, and/or electrical running above that drop ceiling.

Right now I am looking at Aker CM-60 fiberglass for around $420Aker ACCTS-3360 acrylic for around $800Delta 226032AL00 "Acrylic" $500 (although I've heard that it is just an acrylic layer over other material).Any suggestions of different units or recommendations of things I should be avoiding?

Best of luck and feel free to send me a massage if there's anyway I can help.

A high-end paint company may also deal in the 100% acrylic products that some companies use.