With on market deals like this, there are two scenarios: 1) you see something that no one else sees OR 2) everyone else sees something you don't

The HOA can decide to do a special project or make a short 3 story elevator more hurricane proof ($800000) or have issues after a hurricane and then you are definitely not ahead of the game.Please connect with me and I can maybe point you in a better direction.

Now, you need to figure out how to find deals and pay for them.

I think it's fair to say it's beyond normal wear and tear, but I'm not sure how much is fair to say "I'm going to have to deal with this somehow, and because of the scratches I'm deducting x." 

Also underwrite deals as if they were going to be a long term rental and then work up to an STR.

If you have no desire or ability to go to your own hundreds of thousands dollar investment, why even deal with it?

That can be done DSCR or conventional but it just depends on the exact details of your deal. 

I have a team that just deals with them but never have I heard of this.

My target asset class is multifamily and I just had an LOI accepted on a six unit deal in South Jersey. 

Depending on your deal, reserves may or may not be required to be in your name - although you can use other accounts i.e. 401ks, IRAs, etc. towards that reserve requirement.