. $50k tends to be the going rate for the bottom end. 

It could be that the owner lied but I’d need to get to the bottom of that before moving forward.

That may not be your fault, but it isn't theirs either and the bottom line is you can no longer provide them with that rental unit.As for damages, considering the fire was extensive enough for the unit to be a total loss, are there needed repairs that still exist? 

Buyer," would be pretty tough to prove is a fraudulent statement in court.From the totally sucker-punch "gotcha" statement from the seller about the tenants true status and why they decided to stick you with the property, my spidy sense says, "seller and tenants could have been in cahoots".These bottom feeders punked you. 

I also owned a 10k' commercial building for 7 years which was a cool investment because my ad agency occupied 51% of the property (bottom level) and I was able to rent out the upper level to basically pay the whole mortgage (sba).

Rules tell you nothing about your bottom line.

Wells rage from about $5000 to $10K  for a full replacement, but unless the water is bad (contaminated) or dry you can usually fix them its litterally a hole in the ground with a pump at the bottom of the pipe, everything else is in the house and as simple as can be, a $20 pressure switch and a $100-200 pressure tank is pretty much all that usually fails. 

.- $400K duplex in South Austin with $365K loan balance, cash flow neutral acquired in 2018 (FHA loan) which would cash flow about $250 / month if I paid down the note and refinanced to avoid PMI and lower the loan amount.

This leaves you with bottom of the barrel day laborers, subs with no supervision & Craigslist type folks...Not the way to go.

Most agents just want to get a deal done, they are not as concerned about getting sellers the absolute top dollar (or bottom dollar if you are the buyer).Instead of trusting that your agent is doing the right things, ask them what their plan is to sell your home.