If want passive just buy stocks or class A lower leverage multifamily which is easy to self manage. 

I estimated capex at 10% which I think is low considering the deferred maintenance, 10% property management, 8 percent vacancy.

Staying involved in a business partnership while dissolving the marriage will rarely work.If you split the properties, I recommend hiring a good property manager.

Especially in Iowa when it is 0 degrees and 30 mile per hour winds.These properties we are doing have the Teak component, but they all have secondary values with locations, building sites, phone/internet reception, water, palm trees, fruit trees etc. 

It's an estimated cash on cash return given current rental rates subtract expenses assuming 7% interest rate, 10% management fee, 5% repairs, 5% capex and other expenses like mortgage, insurance, tax. it's a estimate to tell you what properties to analyze vs ignoreyou can see the are pockets of negative returns as well as pockets of positive return. this is to supplement the data @Devin Conley provided

Unfortunately, not many around like that...The appraisal is about $150-$200 higher than standard cost because they likely went through an appraisal management company ("AMC") to get the appraisal ordered/assigned.

Without accounting for management fees (I have not yet decided if I will try to self manage), and with planning to raise rents to typical market of $825 for each of the smaller units, and $1200 for the larger unit, does this seem like a worthy first investment? 

I have grown insanely skeptical of BP over the last 5 years, yet somehow I am trying the lead generation for both property management and now as a featured agent.

Your parents can look to reinvest the remaining proceeds into a DST, tenancy in common investment, NNN, that are passively managed.

One of the biggest factors in successful flips is building a strong team: contractors, agents, lenders, and property managers.