Please bear with me as this may be a little confusing. 

The reason why cash out refinance may be the better choice is when you pay "All Cash" you can immediately pull 80% of the cash back out without having to wait (6) months to establish title seasoning.I understand you may not want to have the mortgage payment but if you buy "all cash" you can put the cash back into the mortgage or into a interest bearing account to counter the rate.

Anybody else responding, like me, can give you general but not nitty gritty specifics for your area.You can call the local PHA but they may or may not give you answers that bear out in real life or that give you enough info.And I have the exact opposite opinion of @Carl Mathis - I think Section 8 is the only way to go right now, especially in C and D areas. 

Unless he's ripping off his tenants, the utility costs are his to bear and that's likely eating up the $70 a month he earns, and then some.I have ten apartment complexes with shared coin-op laundry.

We currently live in Montana and we could no longer bear the winter.

Not being all that familiar with the KC market, I'm not sure if this particular area would bear an increase above $900/month for 2 BD 1 BA.

If it were mine and if I were going to keep it,If it has drinkable water (well) and perk down soil I would build a small desert get away house for myself, with roll down shutters.Then when that was done, further in off the road I would begin construction a real nice desert get away house for myself with a pool and a hot tub (and roll down shutters.Then use both houses personally as a wanted.

If the current owner just simply put up a few non load bearing walls to make a few extra bedrooms within the existing footprint, then there's probably not much to be concerned about from a construction standpoint.

They don't understand that a house that is 9 inches higher on one side is a very common thing here, and they are demanding a soil report, a safety report from a structural engineer, and some type of chemical something-or-another report.

Most walls are not load bearing so they can be removed and restructured.