She'll pay me market rate rent, thus keeping that money in the family, and the condo will eventually transition into a more traditional rental property that will support my retirement and that my children will one day inherit. 

Taking apps and structuring loans is only one part; you also have to understand marketing, lead gen and prospecting, and day to day business management.

Market 1bd rents are about $1500-$2000.Ideally, we would have 24 months to get thru plans/engineering/permits/renovation.

Also, are there any market recommendations you can give me for pre-foreclosures?

In this market small multi families are not traded frequently meaning they do not have comps for these properties.

I’m currently diving into the real estate world, focusing on finding off market deals and distressed properties as a bird dog.

Quote from @Alex Olson: Kansas City is a great market for Build to Rent and traditional garden style apartment complexes.  

What should be the number first step after picking a market?

Are you getting the property at market rate or below market rate?

Each of those should know each other in a market as well.One thing to be aware as an out of state investor is that there are unfortunately people out there to take advantage.