This is where emphasis starts hitting on "see how we helped so-n-so".

The homeowner, whom my brother in law purchase the house from, was losing his house and he owed 30,000 on it in Riverside.

I have seen too many people not only getting in trouble with the IRS, but losing their investments to sketchy but appetizing "opportunities" to cut taxes.

I agree that leveraging your primary residence with a HELOC to buy investment properties with tight margins is a great way to lose your house.

They tend to start doing "fire sales" which means dropping prices which causes all of the homes they closed on the previous 12 months or more to lose value based on new discounted comparable sales.That is why you see builder always offering crazy "Builder credits" which in most cases are "ghost" funds. 

If not you will end up losing money and time to a loan officer that is promising you that they can help and only waste your time. 

They can lose their voucher and get kicked off the program. 

Anything less, I feel we are losing.

Can't really say for sure in WNC, but on the other side of the Smokies, the mass sell off didn't happen ...yet, because these folks paid too much for the STRs and are still thinking they can get out without losing money.  

You can add language such as "Inspection for information purposes only" or similar to convey that you won't expect repairs or cash concessions from the seller, but you do not want to lose the ability to walk away if you find that the house is in shoddy condition and you should not trust an inspection report that is not from an independent source and provided to you outside of the seller.