If, B: The seals are bad, replace them because this will then be a selling point, but go for the less expensive option because you have the nicer house on the street... putting more money into making it even more nicerer will be a waste... if that makes sense.Another option would be to say that you're giving the buyer an 8k credit towards windows of their choice (or they can pocket the money if they don't want to change them). 

There are IRA and other designated IRA that can bring down your AGI.  2)If you make way over 150k, than I would suggest investing in a diversified property group with different outcomes (some rentals might not have a good future appreciation or in a bad area, but have a good cash flow that will absorb your other rental loss ). 3) Invest in other business as a passive investor where you can generate passive income.

Badly!

I want this house pretty badly but I do not want to overpay it.

I have no idea what the true numbers are yet...just used those as a bad early morning example. 

How bad do you need the cash?

Not a bad worst case exit strategy.

A couple of the lease rates are below market rent/sq ft, so while I'd like to bump those up a small amount as they've never been raised, I also don't want to immediately have a bad reputation with those tenants.Suggestions or past experiences?

I had a bad experience with using the title company that auction.com provided. 

Obviously there are places to avoid, but Detroit is not nearly as bad as everyone outside of Michigan would have you believe.