However, that would mean that you would have to remove all painted/varnished surfaces (a complete gut job) and have it supervised and signed off by a certified person.

If somebody was "supervising" the worker, it should have been noted whether the worker used pipe dope on the fittings, or whether the yellow Teflon type tape was used; if white Teflon tape was used on gas fittings, that is not acceptable. 

The sale is being court supervised because the Dept. of Health Care Services has a claim.Medi-Cal will not settle.  

Absent supervision the tenants will destroy any work we do within a month. 

I believe that in my state, absent extraordinary circumstances, I would be limited to simply a negligent supervision/hiring claim.

If you are new to the town, how did you find reputable general contractors or sub contractors without supervise them?

A puppy needs constant supervision and chews on EVERYTHING.

Do I purchase the house in my LLC and finance the repairs, let Joe supervise the rehab and divide up the profits when it is sold?

We don't use title companies here.That said, marketing a property you don't own is illegal in MA if you are not a licensed real estate agent working under the supervision of a broker.In addition, if you put a property under contract without both the intent and the ability to close on it, you could be sued for "fraud in the inducement".The only legal way to wholesale (which isn't really wholesaling) is to close on the property and then resell it. 

I would ask them what their plan was for replacing the part that was stolen from them while this was under their supervision.