I kept hitting snags with getting a HELOC or regular loan in spite of excellent credit and savings because of debt to income (no W2 job), or the way property was held or described - so many little things you never think of! 

I then spent the next 4 years as a concert promoter in San Jose, CA until the reality of living in the Silicon Valley came knocking. 

IMO anyone advocating walking away is promoting harm to the unsuspecting public.

I do not know how hard it is to get rid of a placed tenant in your location, but regular inspections would allow you to catch a problem early before it becomes too bad of a problem.  

They are certainly not abundant but we do find them regularly and close several each month.

Remember that hard-money loans typically charge significantly higher interest than a regular 30-year conventional loan, and they'll typically charge up-front points and fees as well (which I don't see in your budget).Your time budget for this rehab is 2 months. 

The idea being to promote studying instead partying (potentially decreasing the damage/complaints on the property), incentivizing the tenant to stay throughout their college career (decreasing turnover/vacancy), and developing some additional motivation for a tenant to choose my property over another similar property. 

We're real estate friends... hang out at meetups, text and talk regularly, etc.

Local REIA- (Real estate investing association) Every State has a variety of REIAs- pick one and start going regularly.

If you want the property to be appraised according to its ability to produce income, they might decide to use their regular criteria for income-producing properties.