Can anyone offer advice or give me an example of how to formally define such a situation?

If you are comfortable with the other aspects of the property I wouldn't over think why you are getting it at a discount. 

Define your Why. 

Someone defined as a 'real estate professional' can us the depreciation deductions to offset, ANY other income. 

This makes both student and parent responsible for fulfilling all aspects of the lease agreement. 

@Tom Smith Investing in Houston is a good idea from the aspect of population and job growth.

Small towns should have every aspect looked at with scrutiny even more so than big metro areas. 

Initial signs point to these areas as being healthy opportunities as long as the right deals are found but it would be extremely helpful to hear more about the cash-flow opportunity (as population growth may be driving up prices), if this area was hot a few years ago and may be cooling down and any other market-specific aspects that I may be missing/not including in my research.Any feedback would be greatly appreciated!

In my opinion you need to find a property manager who you trust or you need to manage the aspect of choosing which tenants will be placed.

I am seeing prices for light rehab (some Sheet rock, paint, grout, caulk, moldings) for about $3,000 for a one bedroom unit- I mean there are so many ways you can define what is light rehab vs medium etc- but I got a few quotes for painting/some sheet rocking, new moldings, etc and that seemed to be the range (like 2500-3500$ for a one bedroom) including materialsplus an additional 300$ to clean out debris, and window repairs I'm still waiting on separate estimates for but can share information on what I get back :)