I am targeting homeowners with dilapidated homes that need repair and offering to pay for the rehab and split the profits with them at the end of the project after the sale of the home. 

Like I'm calculating to spend $1500 month between mortgage insurances and HOA but think if I rent it I'll probably only be making $1250 a month.

Most of them have offers and are under contract.

Any thoughts on writing an LOI, or would you suggest an offer?  

I think trying to get her out (may have to offer incentive) is the number 1 goal, then move forward from their if that is not a possibility. 

It is important to conduct comprehensive research beyond Zillow; you may want to hire a professional home inspector to evaluate the property's state and repair requirements, as this information will affect your offer.

Look for people that have owned for over 10 years, and get it from them off market even at a deep discount and do the work of fixing it up and renting it for higher, or if you want to buy on market I'd definitely recommend offering below asking, as most multifamily that hits the market in these areas are tremendously over priced. 

One of the benefits (at least where I am) of putting 20% down is you don't need to pay for mortgage insurance which (over time) is almost as much as putting the 20% down.

If the market or a single buyer is offering you the above at a price that under values the property in whole then buy.

And, since I can have an insurance policy on my properties, why would I buy treasuries?