I'm looking for insights and best practices from fellow lenders and financial professionals on how to effectively manage borrower relationships.

If you really want an answer you can confidently rely on you'll need to engage an attorney practicing in the state the property is located in and the state of residence of your grandparents and have him research the specific facts of the case.  

How have they impacted your business practices and client interactions?

Those places practically give rooms away to get people on the gaming floors.

It's an important distinction to make.You're right that passing on legitimate increased costs to customers is a normal business practice.

Inflated ARV's and underestimated rehab costs are common practice with most wholesalers, much of which are newbies who have never flipped a home themselves.As another stated, there are other ways to land deals besides wholesalers so cast a wide net and use multiple avenues to funnel your leads.

Most of my clients that are doctors, typically will want to purchase real estate to not just yield the benefits of RE, but also for opening their own practice.

I was told by my closer today that she cannot Quit Claim the Deed into an LLC, but said it would have to be a warranty deed because they cannot prepare as the under writers came down on title companies as it is seen as practicing law.  

It's best practice to remove them, spruce the place up, and put in new tenants at market rate that have been screened and approved by you.

This could make first time buyers vulnerable many issues like inspection issues and just bad real estate practices.