Would it become more of a standard residential sale at that point? 

Multi family (small or large), SFRThe six plexes you are describing due come available some times for sale  (especially New Britain or Bridgeport), but you need to know the area to avoid the wrong side of town.

I'm approximating that I would be able to acquire my goal of 10 rentals by year 10.  

If the note went into default The investor had the option to get their original funds back or keep the money in the deal for a percentage split of any fees from a foreclosure sale.

It's easier to sell many small priced homes rather than hope for the one big sale.  

I have seen worse, and even been involved unfortunate in worse from the sales perspective.

You could send them a normal purchase and sale agreement and where the buyers name goes just put " and or assigns " after that. 

If less than $500K then you'd have to negotiate it as a short sale with the 2nd lender.  

It's currently for sale for $65K in a $350K+ community.

Since you acquired the property with tenants, I'm assuming you gave your tenants an incentive to leave before starting renovations unless they were month to month... because it's extremely difficult to renovate a property if the tenants have a lease and won't leave.