Unless you commit to a major gut renovation, it's not going to look good, so figure out your own quick-fix options from there.

Question yourself why would anyone pay rent of $1200 for a Class C product when they can get into a B class product.

My suggestion is to work for a major firm and try to work with a top producer in that office. 

The home is listed for $12,500 but it needs major repairs.

After researching different ways to finance a Buy and hold, it seems like the better option would be to use a hard money lender. the only issue I face and also a majority of new investors deal with,  is the lack of skin in the game.

- Major warning signs? 

But it surprises me that a $700K structure placed permanently on a tract of land and used for productive purposes would not qualify for 1031 treatment. 

That being said, if you are looking to invest in some of the older properties you better take a hard look at CapX as any major repair will take a big chunk out of your cash flow.  

There could be interest only years within those terms or it can be a hybrid product as you mentioned. 

It may be worth it though, I actually used to rent an apartment right around the corner from this place, it was in a four unit building that’s as almost always at full occupancy, as far as I remember the entire 2 years I lived there only one apartment was ever vacant and it was rented in about a months time.I found a 3bd 2ba MH on my local Craigslist that seems to need minimal work, the previous owners did major updating, asphalt roof was replaced about  7 years ago, new furnace, new floors and paint.