Paying for physical and environment inspections (100+ units)

[Michael Yin]

I have several questions related to paying for inspections when buying large apartments (100+ units)

1. ) Where does the money come from to pay for the thousands of dollars these inspections cost? Does it come out of the pool of money that's collected from the investors for down payment, closing costs, and other transaction fees? 

2.) Are the fees paid directly to the companies performing the work before closing, or are they paid at closing?

3.)  If they're paid before closing, what happens if the deal falls apart due to inspection results? Is that money lost, and if it came from the investors, do they understand that things like that happen sometimes?