Just had my home inspection and we found out that the owner was paying for the water/sewer/hot water for both units.  

But I could be wrong.Can anyone share some knowledge on how much to build the parking lot, automated payment collection (I saw a credit card machine in the middle of parking lot with solar panel on top of the pole), and cost to undo the parking lot and build back the apartments?

these are the biggest challenges in short term rental in hot locations on the coasts.

I sure hope we come across as legit, education and execution based and not like full of hot air.

Being from long island as well there will be hot times and cold times to invest in properties.

Which is customary in hot real estate markets.

I am trying to distance myself emotionally from this (I'm white hot mad right now), and I know that being done with them financially is best for all, but what can we do legally? 

Good question...I am not sure of the exact parameters you would set in your search, but look out for the lemons with all the juice squeezed out of them...That is, pay attention to CAPEX and try not to grab any hot potatoes where the current owner is selling just as about everything from the driveway to the roof needs to be replaced soon (or before it gets too hot, or costly!). 

Everyone here knows we're in a hot market, MLS houses sell for $450-800k retail in the areas I'm searching.  

If it is hot then the system may run constantly. if it is undersized or there is a room that needs a supplementary window unit you can ask the landlord but I doubt you will get that from them it would be for you to provide.