In a hot market. What are your thoughts on waiving an inspection contingency if there is a tenant already in place and they said everything is working fine?

I'd still only do it if you feel comfortable assessing some level of property condition on your own. I don't trust tenant opinion on anything, certainly not whether e.g. the furnace is nearing end of life. Waiving an inspection contingency doesn't mean "have no idea what you're buying." You still need to do some level of due diligence. You'd also want to make sure you have adequate reserves to fix something when you're wrong.

Also makes more sense if the property was built ten years ago than if you're buying something that's 100+ years old.