Then they are shocked that the damage they did to the house combined with the calls to health department resulted in red tagging the house.  

Unless you wear a red suit, have a white beard and collect your rents in a sleigh, that doesn't sound like smart business to me.

Also the realtor said I could only do a cash offer or use a construction loan, is that a red flag?

I have a pressure test scheduled for next week, so hopefully we get to the root of the issue.

I use a red pen to write the message.

Wow, Multiple Red Flag Warnings!

We're not in a position to act on this property in any event, but is the recent transaction history a red flag for anyone?

if so, i would dig next to it to see how deep it is, it needs to be at least 18" to 24" deep, this is a barrier that keeps it from spreading past that. you will also just want to check for off shoots/ roots that may be going over the barrier, just trim them back. if the barrier is that deep and you keep the off shoots back you will be fine.

After completing the inspection, we decided to back out of the contract as the property had some red flags in the work that had been done on the property.

So I took the red-eye to Indy, and spent a day with Clayton's acquisition manager, Bert Whalen, and Bert's wife, Natalie (the property manager for the whole operation).