Also, when conducting one's due diligence, what information are you looking on for the house and how are you finding information re: liens, encumbrances or title defects?

When touring homes in East Oakland I notice there is a higher concentration of defects on the property than some of the neighboring areas(Tampering with electricity is the most common I see)- If Oakland comes in and makes owners bring these homes up to code before owners are able to make $ off of them then one could expect this to impact home values and rental rates!

The law says I must disclose all known defects, and while there will be little to no known "defects" when I sell this house, California disclosure forms ask the question "were there any defects in the past that have been corrected". 

A missing door casing might be overlooked, while a non-operating window will be flagged. 3: Some inspectors find every defect, while others miss obvious problems that you were likely to address in your rehab anyway.

Ultimately, defects in the property could increase the chances of the buyer defaulting on payments and losing the home.Another risk for contract for deed buyers stems from the fact that the seller retains the title to the property during the life of the contract.

But it's also can be like being born with a heart defect that no one detects until a super healthy 18-year-old athlete drops dead playing basketball. 

Disadvantage of the old apartments is that they have often defect and stability issues, but again, therefore, it is so important to buy a national monument protected building.

I buy them right off of MLS.for our model we pay a flat fee.. and keep the contractor completely separate for the above mentioned liability reasons.. and even then  when I build a subdivision as the Developer hiring the GC I buy 1 million 10 year liability policy which cost me 20 to 30k.. basically cost of defect defense ..so we pay 15k per door flat fee.. but they are building 20 in  a year so GC has NO risk.. he does not need to be in my books.I set it up where the GC signs on the one account for the vertical.. but my office cuts the checks for him and charges a little fee to do so.. this way I stay right on top of lein releases and all invoices come direct from subs.. keeping mark ups much more difficult..

Popcorn ceilings in older homes are almost always covering up defects.

The plumbing issue is just one of the numerous defects in the home as well.