You may have already considered this, but you might want to keep the water/sewer bill in your name.

I'm not sure how conservative or frugal you are but some of the water and electrical usage by my tenants are astounding, and I am so so glad I am not responsible for their utility bills. 

Everything in the unit (floor to ceiling) was wiped down with vinegar/water and then I shocked the entire unit using an Ozone Generator. 

A flooded basement with just 1 inch of water is enough to cause a lot of destruction.

Ice water is on the house.I'm a regular attendant at Johnson's meetup for a good reason.

Install new water heater.

So I am looking at a duplex that got water/mold damage on one side, and minor water damage (Door left open or something like that) on the other side.

Austin was named the best large city to live in, followed by Raleigh, Colorado Springs, San Jose and Seattle, San Diego.The worst large U.S. city in which to live, according to WalletHub, was Detroit, followed by Memphis, Philadelphia, Cleveland and Indianapolis.Wallethub report here - http://wallethub.com/edu/best-worst-large-cities-to-live-in/14358/ 

They are all vacant, except for that one with a squatter dude, and I don't know which unit he's in but he had cable and lights and water.

You will need engineers to do drainage studies.It will cost you at least $25,000 for the subdivisionYou will have additional costs during development because you will likely lose your water tap and your wastewater connection on at least one of the lots (I'm assuming that the existing connections will no longer fall within the guidelines of the land development code)..The city will tell you that this takes 6 months.