Think it won't effect A and B areas--look at the BMW 7's and Escalades tooling around in the tough neighborhoods (they have more than enough money to spend).Forcing people to unknowingly house dangerous hard to deal with individuals (between prison sentences) is harsh. 

I ended up having to hire my own exterminator who would come and do a chemical spray every two weeks. 

The only thing that matters is the asking price and your offer price, the ARV is something you use to calculate to see how much money you can make and you can work backwards to get to an offer price, but again, how are you computing these ARVs and how much experience do you have in assessing repair budgets.I don't mean to be harsh, but holding a firm line on a percentage like that will not get you far in a time where everyone and their cousin wants to invest in real estate and is willing to overpay for it.

Again, apologies if that comes across as harsh.

Stop asking us what we would do and go ask them what they want (sorry. that sounds a lot more harsh than I actually mean it).

Working this into your lease yearly is certainly the best option to avoid a harsh rate hike when your tenants were previously enjoying paying below average rent prices. 

Not trying to be harsh here but I need to call it like I see it.

This is going to sound harsh but your expectations are way off track.

I am not trying to sound harsh, but you have two answers: help them with the payments or buy them out.

They are big, we are not. so stop the moralizing about that we are greedy or harsh or other stupid things when it's our business and not yours and we do as we think we need to do. it's completely and totally none of your business