I don't want to be in a worse place afterwards for immediately fixing and then being out of pocket with no reimbursement from any party. 

My second favorite part is how you never addressed the actual question and main point of my post.

Material misrepresentations or omissions on the Application will constitute a default under the Lease or Rental Agreement between the parties, and applicant will be responsible for the cost of any background checks performed.

I’d love to start a discussion on Risk Management in Fix-and-Flip Projects and share some insights from my perspective as a lender.Having clear and detailed loan agreements protects both parties.

So if there is damage that can't be rectified through reasonable effort with both parties (ie. damage that the buyer is not willing to claim on ins., won't credit you the cost to fix, a delay longer than 30 days while the bank is processing "re-inspection', ETC) than you can cancel the contract and receive your escrow back. 

The strike price can be set to any amount the parties agree to.

I've been told the hard part is finding a builder who's willing to build without me paying a large percentage upfront.

If you're up to the task, listing on Zillow or Redfin will be your best bet.There are numerous studies that show listing on the MLS will not only get you more net proceeds but also eliminate the liability from you as the owner by using a third party to sell the property.

Can I ask what your favorite part is so far? 

If you're 50/50 on whether to do it, I would encourage you to self-manage your first few rentals and then when it becomes too much of a time commitment turn it over to 3rd party management.