After the first year of paying for fuel oil to heat the building I switched to Natural gas and cut the heating bill in half.

How concerned should I be about the pending law suit?

Rents run about $575-$595.I like the sound of $150/unit of cash flow, but am concerned in my target market it's out of reach. 

Can the expenses be cut how much and by when.

That being said, many of the smaller towns along the coast and inland have a smattering of multi-family properties, which may be a better choice if you're concerned about school district, etc.

https://insiderlouisville.com/government/affordable-housing-advocates-to-discuss-impact-of-budget-cuts-on-low-income-families/The assessment found that Louisville has a $3.5 billion gap in affordable housing.

Only concern would be 121 exemptions and financing requirements for investment property.Mark

BP has TONS of good podcasts and articles about what people are concerned about when buying a duplex (have you met current tenants, what do rents go for in the area, is there separate metering for each unit, etc.) 

I see your point with the equity building as a form of income which I guess it is but what are you going to do when the housing market crashes and your equity gets cut in half?

Let the tents pay their bills, why would you cut into your profit?