@ChristianWeber I see you have 3 choices: 1-Accept as is and eat it(not recommended)2-Walk away and learn to spot some of the issues before you pay for an inspection. 3-Ask for cash back at closing to cover things in report, start around $15k-$17k looking at your numbers.

It's a popular movement with millennials...

Does anyone have feedback on the idea of presenting the tenants with a choice between two leases? 

The DTI number should have been calculated in 15 minutes from when they applied and sent taxes, and offer choices.

You can also try the Hawthorne neighborhood which is pretty popular with BRRRRers, MDBC2011914 and MDBC2014428 are good examples of whats currently listed.

100% Personal choice. 

Competition would be high in the popular cities but so would the appreciation and rental demand.

But, my duplex house-hack and rentals were probably a better choice for me based on my finances and other life pursuits when I got into real estate within the last 2 years.

I'll be shocked if you can actually get much cash flow out of them (unless you are putting 50%+ down payment) once you factor in the taxes and high HOA fees but sounds like this is more of a lifestyle choice.

Then they can make their own choice if they're willing to wait if you have to go through an eviction to get them out.