Is it a normal thing, and what is usually the reason tenants want to do this?

Not impossible, but normally they have their procedures and don't really want to take calls from random people. 

Our neighbors there are first time homeowners - he has a normal blue collar job and she is a barista at a coffee shop.

Is this normal to only get a QCD?

Simply explain to her that you need enough detail in the itemized list to use against some of the damages that the tenant caused which were above and beyond normal wear and tear. 

When are you normally paid (ie I get paid 2-3 weeks after rent is due from my PM)? 

Do they normally do slabs or can you just do concrete footings? 

Normally, there are a bunch of hidden fees that you need to look out for when you read the contract. $100 is WAY too low and they will be losing money when finding a tenant.

So I am considering two options:(1) HIre a contractor to hand off to finish the project.(2) Sell it as-is.If I go with option #2, obviously it cannot be a normal sale as the property is not habitable in it's current state, so cannot be mortgaged nor insured. 

You can get a bridge loan (nice way of saying hard money) for the renovations and then, once all is back to normal, you can get a DSCR or other type of permanent financing done, but I don't know of any permanent financing scenario for an investment property that would allow the property to be in that state.