I had my current tenant pay for heat but what I have come to notice is that the tenant would purposely avoid filling up the tank to save money on refilling the tank.

I currently have the heat at 50 and turn it up when I start my drive so it's warm by the time I get there.https://www.amazon.com/gp/product/B06W56TBLN/ref=ppx_yo_dt_b_search_asin_title?

After fixed up (New heating units, floors, paint, siding...) around $650-$700.After reviewing the home inspection report, should I walk away from the deal?

If it is a building that has no plumbing, heat or power.

If they are there when you go to enter and won't allow entry, stay out, document it (video, if possible) and immediately file for eviction, for cause - they can't legally refuse entry for the repairs (but you can't force your way in, either).I had one tenant like this - no rent paid after move-in, they intentionally thru trash (and kids diapers) on their porch, rather than removing per the lease, piled clothes literally 2' high on the floors and then called codes enforcement due to the trash and lack of heat (it worked, it just couldn't get thru the piles over the vents).

Currently has one heating system (hot water baseboards) for both units, but there are 3 heat zones (one for unit 1, and 2 for unit 2).

The homeowner- who is my neighbor - replaced it for a larger unit after they added heated SF to their house.

However, you aren't selling because of the recession, you would sell because the original reason for your investment didn't pan out. 89 to 92  in the SF bay area was a brutal market that most investors on BP are too young to have experienced.. but you had some serious retreat in prices.. this happened not only because of over heated market.. but the earthquake and the war.. it was not uncommon to see 50% devaluation on HIGH end homes.. from Marin county all the way down to Los Gatos etc..

I used to pay $1100 in rent and now I've only come out of pocket during the winter months when the heat is on.

As the retail market buying season starts to heat up in the next month or two, keep an eye on trends for this area in the local and national news.