Is this a deal breaker or maybe something I can use to my advantage when negotiating?

If he files a transfer deed to the Land Trust or if he "sells it" then property taxes increase, the change in hazard insurance becomes a tangle.I wouldn't give authority to a bank person to collect rents, file evictions, deal with repairs... there are set up costs and on-going management costs.

He claimed he could get a deal on a new one (stainless, I'm sure) and he would change the fan out himself.

The best areas where you can still find deals. 

I know some do SMS and email blasts but what have you found successful to get realtors' attention to send you deals?

Have you done any deals lending in the Ohio or Pennsylvania markets?  

During that year we had 2 offers yet they backed out of the deal at the end.

I think you can find a good deal and win in every market.

A 3.25% rate would be something I hold onto for deal life LOL :) However, it may make sense for you to do a cash out refi (depending on how much equity you have + how much forced value you have in the property too). 

Plus do you have the time (and knowledge) to deal with rentals?