The way in which your applicant responds to this question may clue you in on some red flags.

you rock Shannon S., excellent description and detailed #'s, you look as if you definitely know you #'s pretty well, i'm a newbie working hard and committed to zap my 1st deal real soon, HUD is an option that i haven't thought about though?

Just knowing the the population is declining would be a big red flag for me.

C" would be an area where the applicant pool has a lot of "red flags" There are more broken windows and curb appeal is lacking. 

I bought a condo once without doing due diligence on the HOA and when it came time to sell, I could not sell it conventionally because the HOA was in the red financially.

Has an old red truck probably 200000 miles on it.  

Re painting, sheet rock the normal.

Bad processes will create red tape.

However, the NOI is trending in the red, due to recent capital improvements. 

All-cash offers provide benefits for the seller like a quick close and reduced stress/red tape.