most standard lease agreements have a clause against sublets/sub lease but the more working class the area the easier it is to find rentals with minimal stipulations.  

I can refer you, if you'd like.That said, the others are right - you are quite close to a break-even / lose money proposition on this deal unless you can minimize the costs to finish it and sell it.

I'm not too concerned about the structural integrity as the two that see water are 20 year old metal buildings and the flooding is minimal intrusion.

This can be something fairly minimal, so long is it produces legitimate income that you report on your taxes, such as with a schedule C.  

Planning your tax minimization strategy 25 years ahead of time!

If you read up on it minimally, you would probably come to the conclusion that it makes no sense to pay someone to do what you can easily (and cheaply) do yourself.I recommend this, not because it's better than REI, but because (1) it is an alternative and/or (2) it is a pretty decent place to leave your money while you wait for your next deal.  

I would be more than willing to help minimize your learning curve if you like, so you don't keep your friend waiting too long!  

So this is where I naively ask, if I use a property manager that's familiar with the area and has experience with screening tenants, don't I minimize this possibility?

Think about minimal rent increase, to be held as reserve fund. 

At the end of the day it is all about minimizing risk.