In my novice opinion, this is what needs to be done to the house:Mold inspection/eradication (water damage from leaking water heater in attic)HVAC neglect (possible mold)10 Fogged Windows (house has numerous large beautiful windows that have become opaque due to moisture)Pressure wash exteriorReplace Carpets (approximately 1500-2000 sq ft)Paint interior walls/sand and paint trimPlumbing hardware has all been removed/needs to be replacedPool filled with excessive amounts of leaves/debris (pump is running)Excessive amounts of trash throughout house yard and pool houseLive Oak growing onto roof (arborist needed)New Sod (currently all weeds)Pool Deck ResurfacingGarage Door Openers have been removedLarge golf ball sized chip on bottom of granite on islandresurface built-insExterminatorPatch holes/cracks in walls (about 10 fist sized holes)Many light fixtures missing (10 or so in closets and bathrooms)smoke alarms missingSo, part of me was disgusted and felt very guilty watching my buddy conduct a walk through via the internet.  

.- What if they damage or steal something?

I know I should build rapport first, assess damages and follow up with an offer. really nervous. any input is appreciated. 

Maryland also charges stormwater fees and bay restoration fees along with our water and sewer, for example.Between water and municipal fees (if in fact just sewer charge) that gives you $938/unit on water.

As I understand Cash For Keys is to help the tenant relocate and to insure they don't damage your property when they leave.

If you can borrow money at 6% from friends and family, that's a great rate - Hard Money lenders typically charge 10 to 15% (and also charge points up front).I would guess the biggest pitfall of borrowing from family and friends is if the deal went poorly and you weren't able to pay them back, as it could damage relationships.

However, since I plan to re-occupy the larger house at some point, I am particularly motivated to prevent or minimize damage to it. 

However, due to termite damage we're completely replacing the kitchen and bath literally from the ground up.

@Shawn Pottschmidt,That's an almost sure sign of moisture damage.

There is evidence of water damage, although none recently.