Is there something that protects the buyer in this period between the purchase agreement and the closing date?

Not sure of how efficient and reliable they are.

Any way you look at it, leaving that one unit as a one-bedroom is a total waste of space if there's a possibility of a cost efficient way to add another

I was actually working with @Brit Foshee and he advised that the wholesaler wouldn't even give us a 3 day inspection period.  

Did you have an inspection done during your due diligence period?

Also, if they are improving the efficiency of most appliances, would the future costs not be deferred by the future savings of such appliances?

Now whether it's just replacing the HWH with a boiler unit or replacing the whole thing with a combination system is still up for debate - I'm being told to do the combination because it will be more efficient since I'm paying the gas, but then again this could be someone trying to upsell me.

This time of year is periodically slower but you also have a lot of rentals coming on the market this time of year and new product being introduced to the marketplace

Maybe you can find a seller willing to hold the financing for a period of time, but they are going to want you to have skin in the game, probably a min of 10%.  

You simply need to find out why it is not selling, decide if you can work with the issues and offer a price that works.99% of properties that do not sell in a reasonable time period are overpriced.