How long have they owned the building and what’s the current occupancy?

A landlord does not need to provide a reasonable accommodation for an emotional support animal when:The property is an owner-occupied building with four or fewer unitsThe property is a single-family home sold or rented by the owner without the use of an agentThe emotional support animal poses a risk to the health or safety of other people, or a risk of substantial damage to property (but this risk must be specific to the animal and cannot be based solely on assumptions about the animal’s breed)"Definitely have a chat with a local attorney to ensure your local laws apply, nonetheless since its an owner occupant, it sounds like you have some recourse to deny this request. 

In future if I decided to build and convert both lots to one apartment building should I convert 2 parcels to 1 parcel?

There are also a ton of people pulling the ESA card, which can make it difficult. 

.- Today (as always) the most fertile group of sellers for sub to deals are the very VERY difficult deal scenario of pre-foreclosure.  

Now 3 years later I work with one of the tenants there and she reports significant 1”-2” cracks have developed in the walls throughout the building.

The larger the transaction, typically the more difficult to successfully reach a transaction.

If you're not from the area you can't understand how difficult of a question that is to answer.

I was looking at an apartment building 100 units for 17 million with a 10 cap. 

Particulars:1) 1st SFH rental property cash flows $400 and we have a 2 year lease agreement that ends in 2025. 2) 2nd SFH I currently live in, I would rent out and probably experience a negative cash flow of --$100 cash flow for first year, break even 2nd year, and build little cash flow moving forward.