I don't charge an application fee, have applicants provide their own credit reports and do my own amateur background investigation, then meet applicants to show the property. 

Yes, ignore the ROI.Yes there is a formula that you use:All income (cash flow) at year's end - all expenses at 1st year's end = Cash on Cash Return        cash you used (cost & fees fro HELOC for 1st year) at start

Sure if they have renters insurance they should file a claim, and you can see if you get lucky and they cover the entire cost  also keep in mind that you’ll probably have mold, so that needs to be remidiated by bleach or something else before new boards are installed  Otherwise, since they are a decent tenant, I’d try to negotiate and work out a compromise with them.

Of course, you can call the city and check your address and see if it qualifies, and if it does, then you get an inspection and pay a fee.

According to him the retail price for this property is $285,000 and so if's that remotely accurate we could make a really good option fee on this one.The challenge for us and this is where we need your ideas, is how do we market this property to the higher end tenant buyers?

Are the payments up to date or is there any reinstatement fee?

Unless you have dozens of properties one LLC per state should suffice.If you have a Wyoming LLC that does business in Illinois under that LLC you need to file as a foreign entity and submit an Illinois income tax return as well as Wyoming.Unless you live in Wyoming you have no need of paying for multiple filing fees and tax returns.

@Jeremy Johnson my advice would be to be to never ignore a good buyer with little to no transaction fees particularly if there is a hefty profit involved. 1031 is a good option but also don't overlook other options such as just paying the capital gains tax (gasp) or rolling it into one of the new opportunity zone investment funds.Make sure to negotiate a great long-term fixed lease for your own business as part of the transaction assuming you want to stay there.

It is about $300 a year covering maintenance issues and a $50-$75 each call fee.

Trans fee only 1-2%.