Can this be arranged on the contract or can I do it once we have, cash for keys etc.

It works best when the arrangement is an ongoing one where you do this on most, if not all projects. 

See below diagram where I have marked where the DWW piping would have to run if the waste stack were where you located it.The main stack is far, far more likely to be located just behind the toilet. and that would go a long way to explaining your current idiosyncratic bathroom arrangement.

It sounds like you have a good arrangement to do self management.

You are a rookie after all, and no experienced investor is going to let you collect rents, screen tenants, arrange maintenance and all that other good stuff.

We want to1) pursue this and avoid realtor fees2) use a 1031 exchange for a multifamily property with higher returns - we have 90k in equity; mortgage= 200kAre there any creative arrangements or factors we should consider when proposing a deal to our tenant?

Are there any verbal agreements or arrangements between the current Landlord and Tenant?

The level of involvement from your PM depends on the arrangement you have with them, which comes with a cost.

I pay for my PM to rent the place, oversee repairs and collect the rent.You could reasonably add a small fee for maintenance calls where you have to arrange for the repair person and ensure the repairs were done.

Will be on tenants to arrange.