If you have natural gas to that spot for a tanked unit, swapping to a tankless is cake.Insulate the garage door if that isn't done.If you are local and handy, you can do a DIY mini split in there for under $1000.

OK- If any wholesaler or Realtor tells you to ignore listed properties or shy away from them is losing out on tens of thousands of dollars this can make you.BEFORE I BEGIN, I AM BOTH A REALTOR AND A WHOLESALER YOU MOST CERTAINLY CAN-WHAT I AM ABOUT TO TELL YOU IS FACTS- NO MATTER WHO SAYS SOMETHING DIFFERENT AFTER MY POST.THE GENTLEMEN WITHIN THIS THREAD HAVE REALLY GOOD POINTS AND THEY ARE ALL VALID, HOWEVER, I CAN SENSE EVEN THEY HAVE LIMITED BELIEFS ON THE POWER OF REALTORS.MY FIRST WHOLESALE PROPERTY EVER (AND I'VE DONE OVER 100) WAS WITH A REALTOR INVOLVED ON THE SELLERS SIDE.- THERE ARE MANY MANY MANY REALTORS WHO LIST JUNKERS (FYI HINT: TRY SCOUTING OUT LISTING AGENTS FOR REMAX AND/OR KELLER WILLIAMS)...

Your gas, more than 1% net.

Is it because the gas connection was turned off and this heater needs gas to operate?

If you're interested in multi-family, I highly recommend starting out with multi-family with your first VA loan as it will be easier to get a single family residence after that.If you decide to pursue multi-family, you'll want to ensure that each unit is separately metered for utilities (water, gas, heat, electricity, etc.) as this is a requirement under VA financing.  

If (big if) you can verify the validity of the report, I don't have an issue accepting them.

Do you have the money to have a new heater put in it of some sorts, electric baseboard, natural gas, propane- as well as a new water heater.

never heard of one running off propane, unlike natural gas or electric.

Unlicensed plumber says that there is a gas leak needing gas pipe replacement, would do it for 4k.

Chances are, you will never get out of it what you have put into it (gas, maintenance, taxes, etc.)