Without more investigation, nobody is going to be able to tell you if this is a symptom of a serious problem, or if it's routine settling that is presenting a purely cosmetic issue.While you can take the safe approach and run away (like some others are suggesting), keep in mind that by doing so, you're giving other investors (like me :) an opportunity to swoop in and grab a great deal because we're willing to spend a couple hundred bucks on an engineer and then potentially negotiate the price down far below market value, even if the underlying issue isn't severe.If spending a little time and money is something you're willing to do in order to potentially get a great deal, then I'd recommend finding a good structural engineer and having him visit the property and make an assessment.

Everything is purely cosmetic.

I was fortunate to find one out here in California that doesn't pitch anything and is purely educational  and they give you time before and after to network.

I don't disagree with you from a pure investment standpoint but the further I go on a business owner/investor the more I'm of the opinion that we need to take responsibility, if we have the power, to provide, in this case, energy efficient items if the cost is within reason.

From a pure disclosure stand point now that everyone knows about it including the listing agent if you cancel this contract they must disclose the violations.

What I did to get a good estimate of what to bring to the seller was to gather information on pure land costs in the area (without improvements), which I found to consistently be $50/square foot.

Also, it may be worth to look at other similar properties for sale and make offers, if your goal is purely investment and you will move out to keep buying for investment (house-hack as you describe it). 

After about a year of searching, pure determination and 14 offers getting shot down because of higher bids, we resorted to short sales.

Is it purely an investment?

Purely a guess at the moment, but he also runs the risk of losing the ability to creatively use the land if the mapping goes the wrong way.