Showing: If the prospective tenants pass that stage, we invite them to see the property, at which time we observe and find out more about the prospective tenant.

And sites like padmapper and zilpy, and zilliow and Craigslist help to do that survey; I bookmark the search for those so that when the time to increase comes along, I click the bookmarks and observe the competition in the market. 

I've instructed the tenant to file a report if any illegal activity is observed and to take photos of the issue and send them to me.

Have you observed them walk; if so, how is their gait pattern? 

Also, for moral compass type questions an in-person interview would be best so both the verbal and non-verbal communication can be observed.  

Be prepared to observe:* Demeanor, interpersonal skills, communication style.

I can see, clearly, you have seen some red flags and are leaning towards not renting them.Furthermore, I sense, per my observation of this thread, a bit of anxiousness in renting out the unit quickly.

But honestly if you are happy with an expert that works in courts and legislature rather than observes in the real world, I have no reason to argue with you.

Its presence may exist without the knowledge of the structure owner and may be concealed from the untrained observer.

No real estate agent is gonna put that wreck on the market for 300k when it's probably not worth the money she owes on it.I think you should either drop it and find something in better shape for a beginner to handle or bring in a real contractor to inspect the damage and give line by line estimates on the repair costs.I believe you will find you need over 100k in repairs and updating assuming your observations were correct and verifiable.I wouldn't offer her more than 80k for the property as is which would make it a short sale and need 4 to 6 months for the bank to approve it.