This is usually due to a credit score below the industry desirable score of 680 for a Commercial Loan.

I live in a very desirably town in upstate NY, refinanced at a super low rate, so will keep the house as a rental.

For $1,500 renters in Cincy would expend very nice place on a quiet street and desirable area.  

Most often it's in free & clear properties but, in a high enough desire area like these, and with low enough mortgage balance, yup, some can 100% get enough on the sale to have it all make sense because as @Jay Hinrichs has pointed out that in these areas the majority value is in the land not the structures on the land. 

There is a mortgage so that also adds to the amount desired, though my inexperienced self still feels it would sell for a pretty penny once fixed up.

We are looking to buy a condo in Chicago as the new rental, for a variety of reasons, but most importantly because it would rent better in the city, and it fits our desired price point (so we can allow for the rest of $$ from the sale for paying off their Oregon home and pay all, or some of the taxes on the boot). 

The neighborhoods are not upscale but they are desirable so good tenants are typically found quickly. 

If it's just a money grab and there is no desire to associate with the aforementioned, you will most likely be on the losing end and feel very negative about the program.

Repeat as desired.

Nice to have a problem that the properties have appreciated so much that the LTV is below my desired LTV goal.