Painting the walls is a normal maintenance item; where as skim coating is not and must be depreciated.If you have any specific questions don't hesitate to ask here as I'm sure many have the same question.

@Lawrence Eddy, I know it wasn't your question, but as Alex suggests, your best strategy might be to milk this rental for as long as you can and use the savings you have to purchase something that will cash-flow sooner.

Our bank didn't want to touch it, and who could blame them when they are milking that interest rate.

Now I'm literally down to skim coating the stucco walls (they did it to hide the water damage), refinishing the floors, putting new light fixtures in and finishing the remodels on the kitchens/bathrooms. 

I admit I only skimmed your post but to answer the question you pose in the title; All the banks and servicer's I have dealt with, Chase, Bank of America, IndyMac, Ocwen and others, require the property to be listed with a realtor before they will entertain a short sale.

That is like saying because you can flip pancakes you can milk a cow.

I've been looking at TK investors but thinking that they skim quite a bit off the top.  

What you're describing sounds like an equity skimming scam that many states have outlawed. 

One thing I haven't seen mentioned yet (I did skim through the majority of the posts) is look to purchase in areas with better numbers.

The tenant milked the system and was able to buy a nearly 600k house!