With that said, thoughts on the type of flooring I should be using to replace the carpets? 

Both sides have been rehabbed with new fixtures, paint and carpet.

They also have completely changed their statement and have now replaced all the carpets in the apartment at my cost.

He wants to replace carpet and paint walls.

Also, a carpet guy I talked to said they are at least 2 years behind in their orders. 

Since I have taken possession I put in all new carpets and it is now occupied by tenants and is cash flowing $650/month. 

noCost for tear out and replacement of br tile and putting carpet down might be about 750-1000 for the 3 bedrooms.  

I like Vinyl flooring because it nice and last longer then carpet, but wouldn't change it if the seller just put new carpet. 

The total cost of rehab for this project was just under $16,000. major rehab break down:-unfinished attic was broken into 2 large bedrooms - new attic window to meet egress-upgrade electrical -carpet second and third floor-laminate flooring kitchen/bathrooms-created a new bathroom on first floor.

That said, you can expect this property to have problems like: no functioning HVAC, electrical problems, old water heaters, low rent, old appliances, worn carpet/torn linoleum, leaks, etc.Sometimes the rents are not able to be raised for that block, or you may not be able to justify raising them enough for a good return after repairs.