This reduces unnecessary service calls for items like a flipped breakers, reset buttons, etc.

Don't be afraid to replace the players and let them know about the high standards you expect and that should reduce some of the problems.

It doesn't matter if you reduce 10 times the price can still be inflated.

Values hold up best in the closer-in areas; that is just the way planning has supported higher density to reduce urban sprawl.

Me, I prefer my 2% appreciation and the reduced amount I have in rental vacancies and bad renters.      

You listed Mortgage Ins - implies you expect to get a conventional loan with less than 20% down; I think you need to research actual financing that might be available before assuming the numbers you did.Expenses related to a loan aren't of concern here for the building's expenses (although the loan debt service will reduce your net cash flow).

So your effective tax on the income will be reduced anyway.

So don't be hesitant to reduce your offer accordingly.

Assuming the HOA includes exterior maintenance, is it prudent to Reduce CapX and /or repairs to something like 5%?  

Do what you can to reduce your risk as long as it is in compliance with laws that govern your jurisdiction.