When I've seen this it has been because the walls weren't constructed well and there are drainage problems causing the moist soil to push inwards.

Based on that we made choices like going with laminate countertops instead of solid surface, etc.Having said all that, your realtor should be going to bat for you on the appraisal unless the home is simply way over improved for the area.  

Always factor in that you will likely have to do some new stormwater drainage systems and new underground utilities.

I would get ALL the ceiling surfaces one shade of white, no matter how much trim or architectural features, and ALL the walls one color, regardless of chair rail.

I have just started to scratch the surface of real estate investing and I'm glad there is a place where I can go for answers.

Building information C location Built in 2010600/ month tenant pays all utilities (4 currently rented)Purchase price 290000Taxes 3332Trash 172Damage (water damage from top unit to bottom unit, wood floors need to be replaced as a result, 1 unit has lots of cigarette burns on some surfaces, etc) nothing major but definitely not what was seen in the unit that was shown before we were under contract.How do I proceed

Widening the ditches and improving drainage can help a lot, especially if your team is working on multiple homes in a row.

If it's possible to alter the grade of the land or improve the drainage, and the house only got an inch or so of water in it, that house may escape flood damage next time. 

On the other hand “tenant proofing” to minimize damage is important, like a solid surface Wilsonart or Formica.

Inner surface - drywall, KP board, Barker board, lath-n-plaster, panelling, tongue-n-groove boards, some combination?