However, the warranty is held by a termite and pest control company, who require an annual inspection costing $175 in order to maintain the warranty.

If you rented out your unit without one, and god forbid someone got injured or worst in a fire, you'd most likely be held liable.

Hopefully, you have good insurance, but let's say you are held liable for $2M dollars, and your insurance $1M as that's the limit.

He has held or lowered property taxes every year for the past several years as an incentive to encourage people to move back into the city.

If the answer is yes then all he would owe money for is cleaning because you purchased it in that condition.On the rent part he does owe you for back rent and you can use any money held such as last months rent or deposit to cover some of it.

Depends on the market, 23% may be fine, it also depends on how long you held the property, don't sweat the small stuff.

If you are creative in your approach, you can get past the initial reaction of the typical thoughts towards a dystopian wasteland of metal buildings and burning barrels of trash.  

A member with a special basis adjustment in property held by an LLC that terminates under the technical termination rules will continue to have the same special basis adjustment with respect to property deemed contributed by the terminated LLC to the new LLC, regardless of whether the new LLC makes a § 754 election.In addition, if an LLC is terminated by the sale or exchange of an interest, a § 754 election made by the terminated LLC that is in effect for the tax year of the terminated LLC in which the sale occurs, applies to the incoming member (IRC §1.708-1(b)(5)).It's interesting (and tell-tale) that those same people who touted you use an LLC to do this made no mention of all the technical problems they bring to the table.  

(Borrowing from your retirement isn't a very good suggestion.)Regarding your offer, maybe initially I'd try $165k with buyer paying all closing costs, seller provides 24 months @ $10k warranty for the roof (funds held in escrow at title company), buyer puts 5% down, seller takes 15% 2nd mortgage (rate 5% @ 5 year term).  

If you let them pay late and not charge late fee, you set a precedence that can be held against you if you later need to evict them.