They win cause they are off the hook and you win because you get a new qualified tenant for another 12 months removing 33% of the parties involved.We will offer a Chicago tenant the opportunity to hire us to locate and underwrite for a new tenant or they can find someone and we charge a small underwriting fee. 

After closing i learned there was a major irrigation issue causing the duplex to sink.

You can't really bring the rent back up cause it'll still be Nov or Dec and you need to reduce your rent at that time of the year to find better tenants. 

Depending on what caused the damage, your insurance hopefully has "loss of rents" coverage... 

Leaks or water breaks (not caused by tenant negligence) is your responsibility.

Same for electric, see if you can't get it individually metered during that first year.Those brand new units should not be too much of an issue for you, as the $1700/mo tenants are not likely going to be looking at the $950/mo units, so that should not cause you too much trouble!

Guess which will cause you less headaches?

And, you can't prove that Tenant #1 is the cause...it's an assumption and one that you don't want to rely on. 

I'd appreciate it if you could give some me more insight into how you create these deals, cause all the deals I've been looking at lately suck.

Buyers have a better understanding of what it is and what it can do.Sellers have a better understanding of how to market the home.Buyers usually know that if it's done right (professionally) then their cause for concerns is pretty small.