@Dan Brewer as I'm sure you're well aware, people aren't in this because they don't understand it.

How did you find this deal and how did you negotiate it?

I just paid off another DSCR so pleased to be in this position. 

Any advice on some additional improvements that could be done to potentially fix this problem without having to buy a new water heater?

the ONLY true way to reserve for sub to melt down is to have the money in the bank to pay off the offending mortgage full stop any thought of trying to refi etc is just wishful thinking sellers credit will get hammered while you go through the process.

I thought I was the only one in the world with this opinion till now. 

Have you heard about this strategy before?

(NOT AN ATTORNEY) and this is not legal advice.

However over the years any many upgrades this park generates over $10,000 today.

This is what makes it non-passive.