Their units were generally in distressed condition and they had to put some investment in so as to rent them, and they had to keep them a long time to recover their initial investment. 

Mostly peeling paint issues and obviously anything that has to do with making the home not in a livable condition. you can hire a HUD inspector/consultant to come out and inspect the property for you and tell you everything.

The agreement should acknowledge that partial payment, and also say the landlord is not accepting that as payment in full, it does not cure the default, and the landlord is under no obligation to accept partial payments in the future.If a tenant does not cure within the time period, but then you agree to let them get caught up later, think about requiring the tenant to sign a new lease as a condition of not evicting them.

I am looking for investors that buy homes in TN, MO, GA and OH that are producing a 12% ROI net , with good tenants, good neighborhoods and properties in great condition.  

It is time/cost prohibitive for me to scrub my lists.

However the condition of his wife's properties amount to a C-.

So it sounds like it needs $7k worth of small repairs and upgrades to make it in liveable condition.

Disbursement of funds held in escrow must meet the conditions of the escrow agreement.

You will usually do a walk through the day before closing to ensure it's in the same condition as when you made your offer.

That almost always means they have a few realtors that they refer clients to who have a house for sale to obtain the FMV (based on the house condition.)