Is there anyway I could go by splitting the water bill between them depending on the number of people in a unit, or would that cause issues between me and the tenants (assuming it is new tenants like you proposed)?

Hey,I am currently under contract on a commercial space w/ over 9,000 SQ.FT - high-quality block & brick construction, stage three electric, new rubber roof, etc.I believe it was most recently used as a retail store judging by a old walk-up counter in the front of the building... the building requires slight work w/ an estimation of $25K on the extreme end.The building is split in half w/ a stick framed wall causing a split of about (43 X 60) on the side closer to the street w/ a (10 X 10) office space that has a bathroom, as well as an additional (5 X 6) bathroom accessible from the entire front portion of the building.The back half of the building measures (30 X 70) w/ an additional framed wall in the back for an additional (10 X 70) storage space... the back half of the building has a second story walkout & walk-down access to the basement.Additionally, there is a basement sized (43X41) w/ an exterior walkout.I intend on putting this building out in phases....- The first being converting the (10 X 70) space into seven (10 X 10) storage spaces aimed for paper storage for professional offices such as title companies, real estate brokerages, etc... the income from this will cover the seller financing note I have on the property.- After that, it's to the front of the building... there's a few general renovation tasks that I won't bore you with but I will be putting a garage door in the front of the building to make this space indoor car storage for at least fifteen cars... this portion of the building isn't over the basement but I'll wait until a structural engineer gives me the okay before I start this project.- I'll also be putting a front door on that (10 X 10) space when we're adding the garage door to have the option to rent it out but I'm most likely going to keep the space for myself.- Once complete w/ the front of the building I'm likely going to mirror the storage setup onto the other side of the building in the back partition...

.- a couple of missing expenses: lawn care and you might consider loss of revenue on insurance which will cause insurance expense to go up. 

Is the current risk that the issues are just not fully addressed and could cause further problems in the future? 

Like being able to give jump starts, take flat tires to be fixed, resuscitate an overdosed person, deal with an intruder when you walk into a property, handle a gang of people that mean to do you harm. 

I had a tenant cause a serious plumbing blockage by flushing tampons down the toilet.

Or the alternative, which many people don't think of...if you or your family unfortunately causes a lawsuit to be filed, the personal suit can go after all properties owned in a personal name.It's good that you have friends who are willing to invest with you. 

Offer three might be a low ball with no contingencies for inspections and such, which he wont choose cause its so low.

That's actually one of the things I really like about it cause it's another way to gauge how serious the tenant is or not.

So since they have lived here for 16yrs, there should be some record if trouble was caused during that time.