I am betting your gonna find a lot more friendly amicable persons than shut doors. 

In my opinion, that is a riskier bet because you have to have a big pile of cash for contingencies.  

The Midwest is probably your best bet for a number of reasons.

The debt may not report to your personal credit (unless you are late on or miss payments, then all bets are off)2.

If you kept the property, and accumulated the CF/yr, it would take you 25 years to get that same equity that's sitting, frozen in your property.Also, if you cashed out and used that same equity as a DP on different RE, at 20% DP, that equity would buy you $2M in PV, not just $700k,...and, I'd be willing to bet, you could find new RE that would have a yearly CF well over $20k/year.On top of that (remembering my initial statement above), any appreciation applied would be applied to $2M, not just $700k. 

Personally, I love them because they offer built-in diversification.In my experience, local banks are your best bet for financing mixed-use properties.

The owner needs to know you are solid, a good bet.

Sounds like their combined income likely beats your other tenants.Your gut is probably your best bet and you need to go with it. 

Mostly this is looking at habitability issues. 3.

Your wanting to do high-risk via extreme leverage....via high risk OOS investing, committed to never being boots-on....... via high risk class c....... doing reno's to make habitable which is high risk at a level we should just call it EPIC risk.....