Also, don't know your market, but option 1 works best in a cool to medium market (when buy-and-hold is the optimum strategy), while option 2 would likely work best in a hot RE market (when RE flipping or sales/services tend to be better).

after I get out if bed since it's 6am here in hampton roads and 70 degrees on Christmas eve so hot I can't sleep.. ..  

This is for installing a short 40 gas gallon water heater.  

With the property suddenly under water, I decided to rent and wait it out.  

Agree with advice given about the criticality of getting in at the right part of the cycle, but would add that it is more about only buying when the fundamental numbers are right; this could happen in a hot market, but is much more likely to happen in a cold one.

You operate a business and to stay above water you need to make money as well.

Our apartment gets so hot from the surrounding units there is no need to use our heat ever.

In Calif, it is code to have the water heater strapped to a wall - - and yes, they take pictures and report the condition to ESCROW, not the city.

Price dropped to $45k and the numbers are as follows. 4 units, 3 tenants($425/month), $15,300 gross, Recently connected to City Septic but has a Water Well Connection(can be switched back), Repairs around $25k(kitchen and bath need upgrading) along with  maintenance.  

Just be careful and not over do it, and get yourself under water.