For example, a normal residential loan would expect  a roof, functioning utilities, etc. 

The major factors like the roof, furnace, plumbing, electrical upgrades, and foundation repairs are all examples of costly expenses you'll want to inspect before closing the deal.

Additionally, if their capex budget was only forecast for 5 yr hold, and they are now anticipating 10 yrs, they may be seeing roofs, exterior repaints, other exterior repairs (stairways, railings, parking lots) that they assumed they wouldn't need to address, but now need to.Things to look for: positive DSCR TODAY, not on pro forma numbers.  

Some common items to note: roof, electrical and plumbing, window updates.

Costs the same to put on a new roof. 

So the house wound up needing the drywall, kitchen, bathroom, roof to the garage, Plumbing, Gas and other stuff done. 

The roof and HVAC will need attention first.

Traditional roof.

renovation including a roof replacement Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

In fact I'd guess you could probably structure a discount into your agreement just because of the logistics (no roofs, no foundations, no yards). 1031 isn't a terrible idea but you've got a few hurdles outside of costs - you're going to have to have some possible properties already identified as your window is small, you'll still have to manage the property unless you go through a PM, you'll lock up more/most of your principal since you're going 'bigger'.