Be realistic about how your criteria might limit you.  

(Appx $120k) I am a GC and will be doing a lot of the work myself so the cost probably won't get that high but I want to be realistic and plan for any unforseen challenges. 

I have the luxury of driving through different neighborhoods on a daily basis. I look for homes with a lock box and no realtor signs. I then check to see if they are on or off market. If off market I search local coun...

It's not realistic to expect all loans to perform perfectly over time and never have an issue.

(Appx $120k) I am a GC and will be doing a lot of the work myself so the cost probably won't get that high but I want to be realistic and plan for any unforseen challenges. 

Been at this a couple of years...talked With a number of sellers...they all seem to think I'm nuts when I get to the part about my offer being 60-65 cents on the dollar...is this realistic?

No, it's not realistic.

The upside is the rents are below market value and there's an additional revenue opportunity with the parking spaces (they say there's 7, but it looks more like 4-5, realistically).  

Yes, cap rates are compressing but even at mid 5s to 6s, w/a value add strategy, comps below competitors in price / rents and realistic underwriting that expects caps to rise slightly w/increase in interest rates, you can still make a very good return.  

@Evan Thomas, realistically, I could probably get away with doing what you describe, but these are my friends who I'm living with, so many of the operating expenses are shared, which is great.