He has no safety net so I don't think its wise to take the risk because if he did a deal, lost disability and then since hes brand new to REI lets say it takes a while until he gets his next deal I just want to help advise him best!

For the most part its just health and safety items, which are items we should have remedied anyways.As someone else mentioned, biggest thing to avoid is having the house tagged as vacant which the city will do if it sits empty for too long (handful of months, grass not cut, etc).

I do plan to buy a property with 30% to 50% off and have it "acts" as a margin of safety.

Gov. mandates, laws, regulations, these are tools to control WHAT the product/service is, think safety focused. mandating no lead in toys, or fall-arrest gear for roofers, things like that, THAT is where it works. 

And in many cases this may be warranted as health and safety issues may be present.  

For example FHA guidelines say you can deny an ESA if they cause an undue financial burden, cause a direct threat to the health and safety of others (the letter from the neighbor supports this), or cause substantial physical damage to the property.

You do not want to go cheap on this, especially when it's for life safety. 

I have applied, scheduled to have the lead investigation for hazards soon. 

@David Randolph - my use of the word "threatened" is in regards to the statements made by, as at the time I understood it to be, the real estate agent negotiating the sale to inform me that I could be sued and a lien placed because I was refusing to sell, which would mean that either I agree to sell and put my children on the street or I refuse and they will sue to take possession and I would still put my children on the street, I took that as a threat to the well being and safety of my children, legally it may not be a threat, ethically and morally, it is to me.

I typically build in an inspection contingency into my offers (yes this reduces my competitiveness of my offers, but its also a safety net to protect my bottom line).