I met that goal...and has been a great journey ever since.By the way, your design skills (assuming they are good) will play a key role in your success.   

Nothing good will come of it trust me. if they are month to month lease then start to increase the rents if the market will bear it.

That will build a lot of goodwill. 

Tenant requests improvements from us - generally not done unless a) it was already on a list of work to be done, b) it is a true safety issue, or c) it is so insignificant and virtually cost-free that we don't mind doing it as goodwill.

There is a school a block away and a Walmart, Ross, Harbor Freights, Dunken Donuts and Goodwill in the adjacent areas (all 0.5 miles away).This property was stripped down to the studs and has been completely redone with granite counter tops, stainless steel appliances, new carpet, tile, heaters, HVAC system, water pipes and electric wire.

People will argue of impending Armageddon if you don't slavishly follow your contract  but it's not true.It can be a way you choose to operate your business - most it's not how most businesses  operate (ever heard of the gesture of goodwill) and there is no real reason (no it will not necessarily get you in Fair Housing trouble) for a rental business to be an exception. 

You want to make it clear you are not letting them out of the lease due to a mold issue, but rather as good will on your part.

Management is good.

Providing referrals to those around you is a free and highly effective way of generating good will towards yourself and establishing a favorable reputation.

You could kick in $5K for the cleanup as a good will gesture.