Move out and then repeat

CVS tends to have more rental increases in the option periods but also in the primary term can have rental holidays at the end of the primary lease term with no money coming in (in those cases a rent credit can be given in advance but it can affect financing so have to plan in advance to set up properly with the purchase).

They're code enforcement, and the violations don't affect the neighbors, so part of my question is why they offer such little time as they're vacant units.And we may fix it, so does anyone have any contractors in that area that they would recommend? 

@Jessica Monroe This a good read to see how the issue might affect your re-sale down the road or issues you could face.https://www.globest.com/sites/globest/2015/02/10/when-is-cleaning-up-a-dry-cleaner-worth-the-risk/

How will having a $100k loan with high interest affect your opportunity to refi?

I have no idea how a converted garage to either an ADU or jr ADU will affect values or future financing.

The comment about local agents sending him MLS data when you know he's way overpriced indicates that a) he is sure he's right and doesn't actually want your input (even if he says or even thinks he does), and b) he's getting poor counsel from other agents regarding how much expertise will be helpful to him - unless he has already spent years and years showing houses to buyers, hearing why those buyers will or won't buy the house, and analyzing MLS data to see why properties did or did not sell, in which case he has a good background.The FB questions verge on the odd side - I might check out a prospective tenant's or contractor's social media pages seeing as that's someone whose trustworthiness is going to directly affect my life, but the questions he asked about it sound like they're meant to tell you how smart he is (aka, how much he actually does not need you... to list a former FSBO... which is significantly overpriced... :)Good luck, would be curious to hear what you decide.

If the existing tenants are indeed "good", and that could mean plenty of things like paying on time or they are just pleasant people, then I'd keep them with periodic rent increases upon lease renewal.Increasing the rent drastically can get you in to trouble and affect your relationship with the existing tenant base.

If not, what is to stop someone from purchasing on a 203(k), refinancing into a traditional, using their new positive equity to secure a HELOC, rinse and repeat without ever living in the property? 

Rinse and repeat and you can see that after several times you will have millions more for a down payment.