High crime areas will also tend to have the lowest rents.  

However, rural areas tend to have less multifamily properties (depending how rural) so that can give you an issue with finding comps for your purchase.

It should be possible to get a hard money loan to finish renovations but many lenders in the space tend to be hesitant to lend in these situations (running out of money mid renovation with already using a HML)

2) the financial upside of a non-performing note going to performing (funds will tend to take this for themselves)3) to not have all my risk concentrated into a few investments Partials seemed like a good option with those three requirements but maybe I'm looking for too much.

@Eli Joffe the most general but applicable advice in your situation is to start focusing on high cash-flow properties with low equity growth potential in the beginning in order to have the cash to boot strap.Once you have a few properties under your belt, then start phasing in nicer homes which tend to be lower cash-flow with higher equity growth potentialThe former helps you boot-strap using more labor and the latter helps build wealth more passively and with less tenant struggles.

My guess would be that as this GP is doing 1031 as a TIC into the deal he would be a little less likely to want a sale, which is a taxable capital event, and would like to keep his money invested and sheltered from taxation as long as possible which tends to fit with my investing style of long term/preferably forever investing.        

Tenants tend to treat carpet fairly well in the bedrooms in my experience - less foot traffic. 

I have sold a bit over 50 million of the northside 2-4 units so seen lots of day 1 analysis vs long term, they tend to not look great on paper in year 1 but rents ramp up each year and they run under 3% vacancy here so actually bring high returns over the long run.

It's a great market as it tends to draw guests year round. 

I will say that each asset management group as well as each asset manager with the group tends to operate slightly different so there is some latitude with what bids are considered after 60+ days on the market.