I am expecting a day of reckoning for this model in the coming years when an LP decides to file a lawsuit based on misrepresentation which traces back to the teaching techniques of the coach/mentors who are essentially offering pay for Co-GP title courses where the students are taught they can use their GP title to raise money.

You won't FIND a deal in this area but you will meet people doing deals and someone might be willing to be involved in a deal with you if you go through points 1 and 2 first.

I don't know where you live, but it is likely that the reverse mortgage company (or whomever owns it) will file for eviction so that they can recoup the money they invested in the deal.  

If you can involve the local fire department to help with defensible space as a start. 

Obviously there is risk involved (as with anything).

When investing in high cash-flow markets, I always recommend working with an investor friendly agent so you're able to gain the right insight on the different areas and the risks involved.

It might be overpriced or might be correctly priced but is not generally desirable because of the work involved. 

Maybe they have other properties they are interested in selling without a Realtor involve.

Now we only bring on high income W2, business owners, and investors who are specifically involved in real estate.

As long as you're filing jointly, both meeting the 2 yr use test, and either meeting the ownership test, then the full $500k can be claimed.