After I asked my plumber to come to my properties and look for leaks, I came to the conclusion that my quadruplexes have huge water bills (water taxes?)

The Lease needs to be clear in its definition of what you are trying to accomplish here which is that the Tenant pays for all of the operating and maintenance expenses of the property.In addition be sure to include an understanding of who pays for major capital replacements (not just maintenance) such as replacement of the heating and air-conditioning units, water and sewer lines, electrical mains, roofs, glass, etc.

What is the age of the property and it's infrastructure (roof, water heaters etc?)

My advice is not to waste your money on testing clean with bleach water and buy a mildew mold suppressant from hardware store it's a chemical you put in a pump up sprayer keeps mold from coming back if on a painted surface get a fungicide paint additive and repaint area.

And since a lot of people looking to do a short sale are often delinquent and in foreclosure, most of these folks are often in bad financial situations apart from their hosing issues.  

The property itself pays off itself after mortgage, taxes, insurance, sewer, and water - and leaves some to reinvest.

It sustained water damage from a broken pipe in the kitchen last winter.

I only consider fire and water flood an emergency(a snake once too), most items can wait until I call the owner and get an approval anytime there is a repair.

Upgrade to water saving fixtures? 

Perhaps I could buy just a single property within the next year with a cash down payment first just to test the waters, and if the experience agrees with me, I could pursue more with the 1031.