You can increase your chance of getting an offer accepted with FHA 203k if you show the seller that you are paying more than other buyers, have your 203k Team in place (203k experienced Lender and Certified 203k Contractor), and write a cover letter explaining your reno goals for the property and list your 203k Team members for reference.

I would personally explain to the tenant, my role is to keep the property in good repair, yours is to pay rent.

I think having an STR could bring in a lot of money so figuring out how to overcome those objections will be well worth your time. 

I suppose technically, you don't need to rent it to do a 1031 (just needed to have had the intention of renting it), but you may have to explain your case to the irs one day.

Explain your concern to the PM.

If the seller doesn't have proof and yet refuses to pay it or doesn't respond to your inquiry I'd probably go to the utility department with a copy of the original statement showing nothing due, explain that you reasonably relied on it and ask if they'll waive it. 

Make sure your lender is on the same page and if you need to back out, have the lender fill out a letter explaining that your financing fell through.

As a CRE capital, the primary objective is to put investors money in to somewhat safe investment vehicles, which in our case is safe but very little cash flow if any due to the low cap rates .

I recommend you call him and let him explain the options.

Everything makes complete sense when your explaining rate of return on investment.