The condo itself was cheap compared to same-sized units in other places without board-ups, so I was willing to take a gamble if it wasn't for the potential insurance problem.

Seems like such a gamble to me but I really love the place.

Owner-occupied ratio no longer met, HOA being sued etc.So in essence it's a gamble anyway when hoping for a future sale process being smooth when talking about Condos.

Choose an area and become an expert in this area - drive it all times of the day, look for homes that have characteristics of neglect - poor roof, un-kept yard, signs/notices on the window/doors etc.  

What  are some specific characteristics of what is considered to be a good deal?

Personally, I think a *good* property manager has already set the threshold of property values/characteristics within which he/she will operate, because marketing and screening C/D neighborhoods is not the same as marketing/screening A/B neighborhoods, nor is it the same regarding vastly different price points.

BTW I spent about 7 years working in Black Hawk and never lost at gambling.

I think @Brad Larsen also gave you some great advice about the benefits of a career in Property Management as well as advice on taking a gamble on yourself, the way he did. 

My questions would be what are the local characteristics when it comes to real estate investing in this region. 

Since it seems like you need more money and less debt, I think the best way you can get to the "real estate gambling table" is to first get more money.