If a title company is involved in the process, they should be able to uncover those clouds, like you said. 

Risk = Uncovering the unknowns (Labor/material cost, permits, inspections, contractors)

Though sometimes inspections uncover issues larger than expected.

Federal liens last 10 years, and then it is wiped away---that much I have uncovered. 

If you have not rented before, then there isn't much that this new management will uncover from the non-existent previous landlord.Now, if you did have a previous landlord, that previous landlord will either have negative things to tell about you or won't have negative things to report.

Can anyone suggest methods (other than courthouse auctions) for uncovering the good leads? 

Hi @Andrew Martin ,There are always deals in every market, they're just harder to uncover in some markets.As for the 2% rule, those type of rentals will, in fact, be D tenants.

Experienced investors are far less worried about what problems they may uncover as well so they often times waive inspection periods entirely.I agree with the other advice, if the numbers work to pay over list price then go for it but otherwise, you gotta be patient.

It’s supposed to be for things that are uncovered during inspection, not that were obvious prior to going under contract. 

Theunits are 2 bedroom, 1.5 baths, 2 uncovered parking spaces each.