I've even originated some loans this year where we were paying off hard money used for the rehab process and these properties had literally no operating history (barely just furnished prior to appraisal) and we still found appetite for 75% cash out/30 year terms calculating DSCR on a Air DNA figure with a slight hair cut. 

My advice would be to learn what your appetite for risk is - based off what you've described, and my experience with working with others in your shoes, you might lean towards a property that is more turnkey (i.e. less up front work needed from the buyers).

It depends on your risk appetite and how much you view risk versus reward. 

Also take into consideration that because this is a non-liveable REO (in it's current state) you would likely need to bring it up to code in regards to fire escapes, fire suppression systems, fire rated door$, etc. $$$$ It's my understanding that if the property is currently being lived in, then it is "grandfathered in". 

You're already buying the asset at a suppressed state.

Investors have different risk tolerance levels and everyone should make decisions based on their risk appetite.

Can't tell you how many times I wanted to take a deal down only to hear that banks didn't 'have an appetite for that asset type'.

@Tyler Lingle Hey I do believe with the new Indianapolis building code once you get over 2 units you are required to install a fire suppression system which isn't cheap(10k). 

I'm not positive what their appetite is for new investors at the moment but worth a call. 

On the terms length and appetite for risk.