In my opinion, a short sales is the least risk adverse and should be attempted first.

What you mean is "adverse possession".

I am particularly concerned about adverse selection - I am being offered the 'left-overs' that more experienced players (including the broker him/her/itself) have/has passed on. 

Loaning to folks like you is their business, and they have to be protect their business, which means they are risk adverse on the rehab and--more importantly--on you. 

My goal so far (please feel free shoot holes in this plan as I love learning from constructive criticism)...once I get my 'wife hack' situation figured out (she is the greatest woman I know but is one of the most risk adverse people I've ever met.

If present, methamphetamine can have adverse consequences.

Obviously we want the property in an LLC to reduce tenant lawsuit liability etc, and my wife is especially aware since she is a doctor and lawsuits could adversely affect her career.  

You should send them an adverse action / rejection letter (that is approved by your screening service) that explains their rights to request copies of reports directly from the screening service due to the adverse action. 

There are some investors who want maximum leverage, even to the point where they are risking their investment in case of adverse conditions.  

A central bank may make statements or pursue policies that adversely affect my investment.