Sub-meter the water, and bill water + sewer costs back to the tenants:New tenants pay 100% of actual usageWould likely have existing tenants (on MTM leases) gradually pay more over a year until they're paying 100% of their actual usageThe property currently has a waiting list for vacancies, so I'm not too worried about a bit of turnover.I've found someone local with experience handling the items in (2) above, who charges $33.33 per month per unit, when occupied.

I think they should weight out both options. 

How you weight those factors will likely yield your choice.

Gradually 3 of the 4 tenants moved out and the one remaining tenant has signed on 3 new people to move in without my authorization.My tenant has paid on time and not been much of a hassle so I would like to give him a chance.  

One more thing for major consideration -- if you're not buying with 100% or high % cash, then in most cases your "low" offer probably won't carry much weight at all.

Pickups also can tow heavy weight for the most part and plow snow with ease.

But this is my first time running into something like this so regardless of his answer I'm not sure the kind of weight "recent bankruptcy" has. 

Beyond this amount the extra cash is split to be weighted in favor of giving the active partner a higher percentage. 

If I think you are a lite weight or will play games I will ask for an increase EMD and will decrease your inspection time.

Even if you have a recording of a city employee telling you it's grandfathered, it will carry no weight in court.