Then use a hammer and chisel if super accuracy is desired to chip away the rest of the hole. 

This chipped paint was on a shed in the backyard not even on the house. 

Also just so you know FHA is pretty strict about you not buying a slum with their money so expect to have some heart burn if there's chipping paint or unlivable conditions. 

And, if the chips fall in your favor, they know you're willing to buy.You'll see people refer to how it's a game of numbers.  

It hides scratches, chips, and install damage well.  

I had a close friend go through this on a few shopping centers that he had insurance money ( Lenders)  on and it made it very difficult to do anything with them for all the reasons you stated.In your properties with a big equity run up its nice to take your chips off the table..

It also came with a delicious chocolate chip cookie, and a bag of chips.

Consumers see mold, scratched floors, and chipped paint; investors see invoices and rent checks. 

My sister-in-law had hers painted professionally and they started chipping within a year.

While it is great to be so determined to get involved with RE at such a young age, I think first and foremost you need to focus on how to preserve that settlement you are potentially getting.You have your whole life ahead of you, you may want to seek the guidence of a financial advisor to maybe allocate a portion of that money into the stock market into some dividend paying high quality blue chip stocks that over a long period of time can give you a great return on your money as well.