Neighborhood quality can vary street to street in some areas and there can also be stark differences in tax rates and city ordinances in some suburbs.   

So I am considering two options:(1) HIre a contractor to hand off to finish the project.(2) Sell it as-is.If I go with option #2, obviously it cannot be a normal sale as the property is not habitable in it's current state, so cannot be mortgaged nor insured. 

A lease created through Zillow or even one you write up yourself is legally binding in the state of GA.

I am looking to invest in apartment units 12 - 26 in OH and I am from out of state?

I think I will go with the judge on this one.In fact, I believe the OP stated "They actually are looking at prior foreclosures that were reinstated." proves that lenders know they can do that very thing.Lenders are not stupid.

@David Niles thanks I'll check it out and reply@David Ramirez thanks I'll definitely check it out, might be a little far, but we've talked about heading out that way at some point just to see the city more, so maybe we'll make it a work trip

They are out of state and their son is attending university and will be the co-signer.

However, I’m also contemplating learning the flipping business, either by working with a flipper or trying it myself, to generate a larger cash position.I’m open to the idea of out-of-state investing but would approach it conservatively.

You can get a bridge loan (nice way of saying hard money) for the renovations and then, once all is back to normal, you can get a DSCR or other type of permanent financing done, but I don't know of any permanent financing scenario for an investment property that would allow the property to be in that state. 

In this case, again depending on state and local laws, you may be able to apply the deposit towards unpaid rent.