The GP got screwed and were force to buy the LPs shares at X$/share.

Forcing appreciation!

Meaning, if you need to do your own pm in order to make an investment work then the investment doesn't work, and you are trying to force it.PM is a job or business, not a required skill for a rental investor.

However I know there are a lot of slumlords out there that will only fix something when they are forced to.

It'll be tough to get into a pure investment in your area for 35k but here are a few options:- partner on the second deal- if the numbers make sense and you could get more cashflow then you could look at a higher price point but my guess is this will be difficult to find- Buy your first property as planned, and save the 35k as reserves and/or just keep it for the next down payment on another FHA after a year- find a place that needs some work where you can use that money to fix up and force appreciation to the propertyPersonally, I would look at those last 2 options where you have the cash on hand ready to deploy for the next down payment or rehab costs if needed.

I much prefer to be able to "force" appreciation rather than merely put myself in a position to "ride" appreciation. 

I didn't even know they could do that.They are the shadiest people I have ever been forced to work with and I wouldn't wish them on my worst enemy.

They may not be able to pay the fines.Assessments that you are forced to pay for repairs or upgrades. 

The overall plan was to force appreciation in the whole area.

Those people will come up with the money if they're forced to.