Stand firm and raise the rent, declining the next month's rent check for anything less than the new, higher rent.

Present the offer and your client will counter or decline.

If the landlord is offering a lease buy out to her, because he want's to change the property then I believe she has the choice to accept or decline that she would agree to move.Basically if you sister does not agree to the buy out then the landlord is stuck until the end of the lease term.. but if your sister can find other housing and wants to make a buyout deal..

I conducted inspections about 5 or so months ago with no problem and did have him do a walk through inspection form 6 years ago prior to his move in, but after his "friend" moved in the tenant/landlord relationship quickly declined.

It is a city that has declined, like no other major city in America.  

I would like my first deal to be close to home so that I can be more involved in the process of going to look at properties, but I live in Chicago and am not too excited by the real estate market here given that the supply is increasing (lots of new construction), the demand is decreasing (city population declining) and Illinois is just going down the tubes financially (some would argue that the state is already way down the tubes).  

This is because they are large metropolitan areas with diverse industries, attracting many people to work and live there, etc.Other cities such as Detroit, Houston, Dallas, .... also offer some interesting investment options as the rental yield can be higher (compared to some of the coastal cities) but then you may have to consider issues such as decline of population, less diverse industries, more land available,....  

But if that main market (for some reason I'm thinking about Buffalo, NY which has lost a massive percentage) isn't growing I don't know that I'd be running to invest it's a 2,000 population suburb or a sururb...Thank you for good insights, looking further into this town, it doesn't sound like a "up and coming place" Population is on steady decline. 

The population of this city has not grown or declined in the last 7 years...

Great question, the answer of course being...If your stated income on that YTD P&L is declining from previous years, we will certainly take that into consideration, and indeed declining income is the only form of stated income that is taken exactly at face value of what the borrower claims, to the dollar (and if you don't even know what the heck a P&L is, the odds of you generating one that shows "declining" income without even realizing it is of course non-trivial).