In addition there were several other smaller issues including structural and aging mechanical.

But even that can be tricky.Dehumidifiers and ACs are fundamentally the same thing - a mechanical refrigeration unit. 

The HOA has to pursue previous owners separately and they have a mechanism to foreclose for delinquent HOA dues.

The HOA Declaration of Trust it states the following:  "No unit owner shall make any addition, alteration, or improvement in or to his unit or any portion of the common areas and facilities to which he has the exclusive use, which may affect the appearance, structure, or mechanical systems of the condominium, or which is otherwise restricted by the Master Deed without the prior written consent thereto of the Trustees.

it's a distressed property so of course there are some things wrong.it's freddie mac REO, way past the owner occupant period which ended in january 2018. it was originally listed at 50k dec 2017. went under contract in july at 42k, now it came back at 38k. but looking on redfin it was on and off the market since 2012.its in a neighborhood where houses are selling between 70k - 135k. in fact the 135k looks just like this one and its on the same street. on the inside it's pretty nice, seems like just paint and flooring. might need new mechanicals etc and some mold in basement. so as a newbie i'm thinking, what am i missing?

And if you don't have 10' high ceilings now then it's probably not a great idea because the mechanicals will make your finished height much lower and you want to avoid a drop ceiling for max value as well.  

My name is Eugene Cho and am currently working as a Mechanical Engineer.

I just recently graduated from college with a degree in Mechanical Engineering, and am currently working in construction.

You should consider avoiding 50-50 as it can lead to deadlock without an easy mechanism for disputes.

If you want to start getting into investing, I recommend to look into the mechanics of all that.