QUESTION :-Should I (a) Ask for a $104,000 Price Reduction (b) ask for the seller to fix it (c) Offer to split cost 50/50 (d) Break Contractp.s.

Or negotiate a price reduction in lieu of repairs so you can just get this thing closed?

Cash back is taxable income/reduction of expenses. 

We saw a reduction of over $200 a month on the other owner’s previous year with same average temps.

I suppose I could attempt to negotiate a reduction in the price, but I think there is a tremendous amount of risk in this note at any price.

Third, they tend to do $50 of work and ask for a $300 reduction in rent.

End result:I spoke with code enforcement and they gave me an insight into what was truly the issue in the unit.The repairs would be significantly more than originally expected which amount to about 10-11k.I sent back a list of items that would need to be repaired and respective costs to the bank and requested a price reduction. 

Obviously you have to evict them- no one is going to give you a magic pill that solves this problem for you without any drama.

If I do this, will a lender look at it as a true reduction of income or see it for the tax advantage it is and disregard the “loss”?

Is that because the POH, once paid off would see a massive reduction in income?