The biggest risk around it in Seattle right now is the city council and their push for more rental regulations,  with several influential council member's stated ultimate goal being rent control.    

If I were to deny based upon 1 of the applicant's credit check, is there a regulated process I need to follow or a form I need to provide them?

Each city/county will have their own regulations regarding this.

To consider an allocation to deduct the old roof you would have to do some research under the Tangible Property Regulations that would allow you to break out the remaining life from that portion of the building.

I had lunch yesterday with a regulator and one of the targets she told me is brokers allowing wholesalers that don't own the property to list and market them prior to them closing.. again what she told me that is a  violation for that broker.. 

Before you do anything sit down and study/learn all your state landlord tenant regulations or get a meeting lined up with a experienced landlord tenant attorney.

At least in the few “deals” I have seen.In NV, it's not necessarily illegal for a licensed agent to wholesale but its nearly impossible to follow the regulations/rules set by the real estate commission, the MLS and still maintain licensure. 

There're thermostats in every unit when the heat is being paid for by the owner, it could be regulated better.

If you were to sell the home you would need to check with state regulations for licensing as a mobile home dealer.

Right off the bat before I’d start calling lawyers and looking up laws and regulations I’d call the agent and ask what their intentions are and how they think this is okay how is going back to bidding justified ?