He missed that some electrical outlets were malfunctioning, the plumbing in the shower was not working properly, the power box was old and outdated, the AC was not working, etc. - Don't be afraid to make sure everything works well and if it doesn't, don't be afraid to ask them to fix it or ask the seller for a credit.

I don't know how a bank will react if the answer is they are going to re-lend it to their inexperienced nephew just out of college who just moved into town to invest in real estate with no experience. 

I'm not asserting this is the proper way, but it's the procedure we've been using with our commercial tenants. 

You could have it framed and let him lay the floor boards-assuming he is skilled and will do it properly.

Get the best rate you can, but it’s far more important that you keep it separate, include all the necessary 8-203 info in your lease, and properly account for it at the end of the tenancy.The DHCD calculator (it that’s what you’re looking at) is great for deposits received after 1/1/2015-and a landlord is permitted to rely upon it per the MD RP Article.

Usually when those conversions happened utilities were not split properly especially since no building permit or proper inspections of the quality of the conversion work performed.

Do I have any action I can take against the previous board for their clear failure to manage the building finances properly?

It's been a long time question for me whether or not I should continue replacing the water heaters and ensuring proper insulation in the attic, or if I should relocate with a tankless water heater downstairs. 

They can make you remove a bed from a room that doesnt have a proper egress window, but I do not believe they can fine you for a room that has a legal egress window.  

I can comment about the Boston MA market: 1% rule is about 45 minutes outside the city Here's the high level metrics you'd be looking at for 3-4 family- Boston proper: $850-$1.4mm2 Bedroom Rent: $2300Appreciation Rate: 6-8%Metro Boston (5-8 mile radius): $750-$1.1mm2 Bedroom Rent: $2100Appreciation Rate: 5-7%Suburbs of Boston (10-15 mile radius): $650-900,0002 Bedroom Rent: $1750Appreciation Rate: 4-5%Secondary Boston Market (20-30 miles radius): $525-800,0002 Bedroom Rent: $1400Appreciation Rate: 3-4%