Meanwhile, if you stop making the payments, the holder of the Note goes after the seller who is now screwed since he can't force you to pay and doesn't have collateral, the property, fork over.That's the short of the "subject to." 

If it’s a full gut, then it would behoove you to do a traditional forced air system. 

People like that don't usually return the money unless they are forced to by the law and he knows for that amt it makes no sense for you to do much. 

I would politely tell him (subsequent of a casual convo) “Hey, just so you know, I had to evict a tennent because of smoking.”This lets him know that you know what’s going on, without being force full or causing neighborly strife.

Whether you do DSTs or TICs you are out of control---and you never want to be out of control in  your investments.What you may find is that after two decades of doing deals you will feel that like a rat on a treadmill---forced into bigger and bigger deals (1031 requires equal or greater value.) 

He is putting down only about 13% of the purchase price which means outside of forced appreciation he is going to have a difficult time finding a lender to refinance with once that massive balloon comes due.

When you are looking to pull your money back out, that means you are forcing 20% equity from acquisition to refinance.

I was forced to "re-trade" and lower my offer because the numbers didn't work with all of that extra expense.

If it doesn't work, don't force it. 

By installing one at the front of that property the Fire Department will see the reflective decal and know that box has everything needed to access all doors on the property saving you hundreds of dollars in damage due to forced entry situations.