The more valuable and desirable the apartments are...the lower the cap rate would likely be. 

Seems like these properties were bought inexpensively in less desirable areas and flipped.One recommendation to think about when considering these properties would be the value you can add to them.

This result is more desirable than letting the case go to trial, where one side may win, and one will clearly lose.You should understand that now is the time to hire a lawyer.

For many reasons, I have developed the desire to invest in real estate.

If one of  the units bring in more money you may want to take the smaller less desirable unit because you prefer the better income form the higher income unit.  

Desired ROI?

I think anyone can be rehabilitated, its just a matter of if they have the desire strong enough to do so. 

Regardless of your desires, essentially any bank is going to require some form of personal guarantee from at least one of the LLC members in the case of a newer LLC (eg; one that doesn't have a track record, existing cash/cash flow, etc.)

Floor plans and layouts are also very important, and sometimes you need to drastically change it to add value and desirability, especially in bordering markets outside of Seattle.  

The location is desirable compared to others in the city and is close to shopping and schools.