PNC didn't care and I would stay with larger banks if youre out of state. 

It is already in contract.You will need 6 month's payments in liquidity and about 20% down.

Can these interior cracks be fixed with some drywall compound, a fine-grit sanding sponge, and some sweat equity, OR are these a symptom of larger structural issues?

At the same time I would not discourage you from looking in CA, but you need to put together a larger war chest.Best of luck to you!

On a 200,000 loan (for example) 3% PI payment is 843.21 (30yr loan) and a 2.50% PI payment is $790.24.Your loan amount must be larger in order to reduce your payment if the rate is only going down 50bps.

On top of that there are extra debt reserve and liquidity requirements.

For Duplexes and larger units, I tend to recommend starting out with a mail piece that is professional, yet personalized.

Looking at my first property larger than 4 units, but finding it very difficult to cashflow with a commercial mortgage set-up. 

We have about 300k liquid that could be used for a down payment tomorrow if needed (but realistically, would only want to use up to 100-150k for a down payment), and about 1.5M equity in our house.How do you think about these factors that you mentioned?

Certainly real estate syndication can be a great way to share risk, pool equity and acquire larger assets but as @Jay Hinrichs noted if you chose that path you enter into a new world of regulatory scrutiny.  We have put together syndications to buy multi-family assets and have also participated in syndications sponsored by other investors as a passive investor.