Third option is feasible only if payment is more than market rent.  

Thanks, I am strongly considering that, it would ultimately mean a $500 loss to me for attorney's fees

Make sure your vacancy loss is worth the rent increase.

So what I end up with is $52K in my pocket and a monthly cashflow in the difference between the 5.5% I'm paying and the 8% i'm charging my buyer.NOW, assuming that this clusterf*** of a transaction that I just described is even feasible, my next, and more important question is, what can I tell the current owners that will show them that this option is better than just listing it and selling it the old fashioned way?

If I was in the OKC area I'd help you out, I'm in Tulsa though so that's not very feasible.

In my experience it depends on location and feasibility of trashing out the units, and HOA fees.

An insured bank CD will only result in a loss if the entire US economic system collapses.  

The first option is each building will have a separate limit and that is the most you will get for that building in the event of a total loss.

Should, can I file these losses for 2015 or should I wait until I have a profit to write off? 

They tried to sell the house before they left but could not sell it without taking a loss, so they decided to rent it.