At what volume should a discount be discussed?

Just something to think about other than having to sell the notes to investors at a discount.

The property needs work and have tremendous potential for an investor or condo conversion.

which jumps my down payment up tremendously. 

Bought stocks at a discount.

If that's the case simply list for your break even point as that is a ~10% discount to market which should help generate some offers.

Since I wanted financial freedom more than I wanted doodads, I developed the mindset of living well below my means, delaying gratification as much as possible ("do I really need this item"), and investing my money intelligently.I don't use discount coupons anymore.

The deal with the non-performing note is to purchase at a substancial discount and try to get it performing again so that you either have a performing note that pays regularly or sell it in a few years as a re-performing note(lots more than a non-performing).

Take that number and give a small discount to account for turnover costs and vacancy. 

Without knowing all the factors such as, what part of town it in, how much property it comes with, and so on, I can not say for sure but I would get all the rental info you can from the owner and ask for a discount or ask for them to make up the difference till you fill all of the units.