Low starting bids don't always mean that the reserve set by the lender was met either.Lot's to learn here don't be over excited and lose a bunch of money on your first buy.

If it stays on the market for a few months, they'd probably reduce the price, but you may risk losing the property.

The worst that can happen putting it under contract is you waste your time and effort AND lose your earnest money AND you hurt a seller by not following through.A serious investor will be able to arm you with the knowledge and paperwork to tie the property up for them.  

I'm looking at building a rental portfolio of 10-50 SFR units in the next few years, with an emphasis on section 8 tenants (I think...??).

With the other attributes I use a point system where they get points for having what I want and lose points for having problems.  

You can gain and lose a lot of efficiency here.5) What is the brokerage's culture?

No time restriction to sell , no deposit to lose, no pressure to sell , no getting out of contract if no end buyer, no need ask someone to reduce price......etc.PLEASE TELL ME WHAT YOU THINK ?

That will give you an opportunity to get a standard lease in place along with a security deposit to cover any further potential dog damage, and you won't lose your tenant.

How much do I pay him up front , and how I can emphasis the quality finishes I expect.

It seems that you are putting too much of an emphasis on what the building could be worth and are willing to pay for that.