Recently moved from Canada so I don’t have any credit or verifiable income, but can put a good down payment down (40k) cash or so.

- I am still narrowing down properties and would like to have a general contractor do a walk through to verify my assumptions.

Have you verified the rent numbers?

Verify income and do credit and background check to ensure it is being sold to the right people. 

One week before the final signing the buyer loses their job after which the loan processor calls the employer to verify employment so the deal can not close.

A quick google search could help you identify the enforcement terms during your initial due diligence but you will want to verify before you close on the note. - For closing, first you will sign a loan agreement to determine what the seller will record, how much they will expect, exactly what you are paying for, and who will service the loan.

@Ryan BlakeI am still doing the due diligence on verifying the income/expenses as well as general condition

Verify every piece of info you get.

Must have references that are positive, employer that is positive (or verifiable consistent income), 1st last and security, and complete background and credit check. 

As for buy and hold, you’ll buy at a discount and the concern will be the quality/completeness of the remediation, which is almost impossible to verify..