I feel your head ache already.  

In my head, for a first flip anyways, it would be preferable to have them for peace of mind.

@Robert Wodogaza I completely agree, I find myself doing the same head scratching that I did in 2005-2006 where I say, wait, they paid how much for that property?

I'm not an attorney but my off the top of my head guess at your liability is 1/2 months rent and most of the electricity bill, plus court filing fees, and if your lease allows for legal fees to you in a case the judge will automatically rule that you pay their attorney with no cap on fees, that could be more than the furnace cost, so if you can satisfy them with paying their full electric bill and possibly a further small discount do it.  

Department of Commerce numbers to see if I can make heads or tails out of where I should be.

@Jd Martin hit the nail on the head there.

We seem to heading for a tit for tat. 

There's lots of updating that could be done to head down a BRRRR path in this unit, and it cashflows quite nicely at the LP...but...Property was already appraised at 10k higher than my offer, but sewer inspection showed multiple cast iron pipe and non-code stack issues that will most likely be 10-20k of work (my guess, haven't gotten formal estimate yet).  

SInce the Tax ramifications of this are way over my head, if anyone has a referral for a CPA in Chicago that has some experience in real estate, let me know!

I'm trying to wrap my head around an idea and I'm hoping you guys can help me out with some facts.