I never make a loan, no matter the equity position, that the past actions of the borrowers lead me to wonder if they will be likely to pay me back. 

Making a well-rounded decision can lead to long-term success in real estate investment.

This will lead to many of the professionals in the same industries who already are not doing that well to fall out of competition and hence be "replaced'.

An efficiency kitchen would be easy to put in as well as a door leading outside.

Assuming this is in fact a good deal, and your friend is a qualified GC, instead of trying to be the lead investor, he should be searching for someone who has the balance sheet to take down this deal on their and be a transactional participant.

Unfortunately, there are times when being accommodating and making exceptions can lead tenants to take advantage of the situation.

It will likely be a web of contractors, engineers, and architects, but some those are ultimately leading to the developer. 

However, that will likely lead to increased turnover and increased vacancy time in between tenants.

I've only ever sent out an offer like that once, and that was to a preforeclosure lead that refused to discuss the property, instead telling me "that's not how real estate works, just make me an offer".  

-A water heater issue resulted in repeated mismanagement—confusing unit assignments—leading to extra costs to fix the same issue 3 times and on each occasion "more fixes" needed to the water heaters that I plumber said was needed.