Often when new landlords confront tenants that have been getting away with this kind of junk, they bolt.Good luck.

Now that I'm actually doing it I just want that personal advice if anyone is kind of enough to offer. 

Most judges, if they find you replaced the carpet with other flooring, won't look kindly on your trying to charge the tenant for something that is a moot point.   

Previously talked with a multi family RE broker who left me with a lot of questions and seemed to kind of blow me off when he realized I didn't have $500k in my pocket right this minute.

Frankly what you have described is a cherry deal for an operator and a crap deal for a buyer with those kind of lease terms.There are many other properties to choose from.

There was a common courtyard area in between them so we put a fence up and now it's just as Dan said, 2 separate houses, with the exception of one water meter.

I agree with @David Krulac - hopefully your property is in one of the 2% RTT areas rather than one of the 4% or 5% RTT areas.The imputed property value used to determine the RTT amount can be found by taking the tax assessed value from the tax assessor, and multiplying (or dividing) by the common leveling ratio that the PA Department of Revenue has posted at their website, for the year and month of the transfer (the values in their table change over time).Once you have that value, and the tax rate for that location, you can figure out how much this screw up cost you ;)

Thank you all for your kind words, I am very excited to get started.

@Cesar Garza What kind of discount are you planning to offer him for the flood damage?

What kind of rent can you get on those 2/2's for 40k?