I would take my chances and the belief that the IRS has bigger fish to fry.

There's some great advice from @Adam Anderson above- if there's a chance, it's with a local bank who will let you make a case for yourself.

Do people find it harder to BRRR with multi-plexes than SFR due to lack of comparable sales proving the increased value after renovation?

You can try to justify a low offer all you want, but chances are somebody else will come by and pay what they are asking. 

The chances are so slim, why worry about them.

You already gave him a chance.

The kind of thing that doesn't make or break your project financials - ie perhaps the jurisdiction doesn't have a great chance of 'making' you do it, so you can take it on more from a 'bring upside value' to your rents, etc.... and you get some 'soft' experience working through jacking something, pouring 1x new footer for a corner post, etc.  

Chances are he's already seen the deal you're looking at and passed it by, but you never know.  

It also looks like there is room to increase the rent because these are two bed, 1 bath units and they are paying less than I was paying for a 1 bed 1 bath a few years ago. 

If you are not familiar with them, you need to be, but the chances that you don't already know about Don Campbell and Patrick Francey are just about nil so enough said.Durham is very much a strong place to invest because positive cash flow is still possible.