My concerns are 1) what neighborhoods should I look to buy in my area and what neighborhoods to avoid?

If the grantee is to sell later on, the note could be paid off and the proceeds donated.I'm not concerned at all about your "advertising" free, the intent is not to profit from the transaction.

Burn the bridges, accelerator to the floor, brakes permanently cut.  

A big waste of money as far as I'm concerned.

In Illinois and Oklaholma, however, due to Wholesalers who have no idea what they are doing, and advertise contracts that they dont actually have interest in,caused great concern for these 2 states. 

Unless you are very concerned that property values are going to collapse, I'd hang on to this investment.  

As to which is better, you need to focus on the very specific neighborhood to see what the demand is.In Dayton, I'm more concerned about the neighborhood, rather than whether they are 1 or 2 bedrooms.In larger properties, my ideal is a mix of 1 and 2 bedroom units.

That being said, working with the sellers agent does give you an advantage because they are more motivated to get your deal done for double the commission, but you are right to be concerned with terms being in the sellers favor.

Any concerns with the current mortgage holder in doing a deal like this from any of you pleasantly experienced investors? 

Perhaps I'll concede that for your particular circumstance 50/50 is very fair and we can avoid a lot of useless back and forth.I’ll respond with my concerns, if any.