House also doesn't have operable A/C...so I don't see any extra motivation to get this done "in the near future" with sweltering AZ heat. 

This group seems to have very little motivation to sell at a discount because they bought super low, put in work recently, are cash flowing very nicely and want a higher pay off on their time/money invested.I think anyone who bought before the crash, had to sit and watch their equity drop and is now watching it rebound will be much more motivated to sell at a discount to get out while they're even or ahead.

If you want to remain in one place you can pick any of the cities I mentioned but nobody can guarantee that you will do well in any particular area.  

It is the only entity structure whose rules allow the business owner to take a “reasonable salary” (subject to social security and medicare) and then take the remaining profit (often as much as 50% of the remaining income) out as distributions not subject to self-employment taxes.

I would be supplying the cash (down payment) and credit (for the mortgage), and my business partner would do all the remaining work (including property management).

How does his motivation and my tactics vary depending on if he wants to put money in bank,re-invest, or what-not?

So they will remained tied together.

If that doesn't work, I would consider talking to any other motivated mortgage broker to see if they thought you could get the PMI removed.

It will still remain disconnected from the downtown area due to the train tracks which is the only big downside.

Simple example:You want to buy $100,000 propertyYou put 20% $20,000 down and ask seller if you can "owe" them the remaining $80,000 to cover the rest of the purchase price.You now own the property and can record your title specifying that you bought the property for the full $100,000.