I pick up rent in person, perform all repairs (that I can) myself and try to build rapport with my tenants.

@Anthony Dooley while I agree with you in principle and always get a kick out of sellers asking to be paid for value they have not created, if there is enough value add and you are confident that you can actually capture the value add, that becomes the justification for 'over paying' on existing performance.

I company buys 1st lien non-performing notes.

I am an active GC and am currently performing a variety of services to a range of customers.

For our purposes, is it better to buy a property that has historically good rent appreciation, price appreciation and low to little deferred maintenance vs a property that doesn't have the same performance all within a good microeconomic context? 

If you get the note, then go to the owner and request the deed (deed in lieu of foreclosure) and if they balk, see if you can get it performing, or foreclose.

That affects relationships, plus job satisfaction and performance.

After acceptance I got a report of termite inspection and treatment, but there is no evidence of termites where they said they treated them, nor is there a sticker indicating that treatment was performed, but there are active termites in another location. 

I prefer to stay on the safer side of notes and deal with performing notes.  

If you believe this partnership is a good deal for you, I would tie some or most of their improvements to actually exercising the option.