Sounds like my best bet may be keeping what I have!

I'm really trying to make this deal work because it seems like a great price. 6% cap at current rents and 7% to 9% with rents adjusted to roughly market value.

He is probably a better bet b/c he isn't going to lose that compared to someone who has a job today, and doesn't tomorrow.  

It is up to the seller to decide if they want to adjust the price.

Working with an agent who has experience dealing in these types of properties is going to be your best bet. 

Maybe studying all of this is unnecessary, but at the end of the day, the more you can perceive change in the RE space, the better you can adjust your strategy and criteria to profit in the market.

I'm not sure of the specifics here so your best bet is to speak with your loan officer and find out which product is better for you.

I would have a professional look at it first, before the insurance adjuster.

This way you may be able to buy a 2nd rental by the time you have to move in.Other than that, Chilliwack or Abbotsford is probably your best bet.

Between the market rate increases and long term tenancies, you might not have an opportunity to adjust the rent as the unit turns.