I started running him through the basic pre-screening questions and red flags flew up left and right but I am not completely writing him off.

As I see it, you basically have 3 options:1 - Move forward and get the clock ticking on equity pay down using OPM.2 - Hold off, and see if the market in your area becomes more favorable to buyers (how long will that take, and how much equity would you have in the subject property if you chose option 1?)

I would debate this in court and win.

So basically we need to do over each unit.

Even if the property appreciates at the exact same rate as inflation (so basically zero growth), every time you make a mortgage payment you're building up equity. 

A few Google searches of "mortgage basics" or "mortgage 101" or something along those lines will point you in the right direction. 

Thats basically what I did.

I am basically focusing on Intel renters.

My bf/gf and roommate tenants (same thing basically) move about 8x more often than singles or marrieds and give me more drama to boot.  

You have basically rejected their agreement and created a new offer.