Omitting information that the seller might've not been aware of does not constitute misrepresentation, due diligence is ultimately the buyer's responsibility.

Keep the deposit, tell her if she wants it, she's welcome to sue you.It'll come down to whether or not a judge feels that a few bugs constitutes a habitability issue.  

In Quebec, doing so constitutes a legal violation of information disclosure...

Under Ohio law, performing any of these acts without a license constitutes a first degree misdemeanor and subjects the offender to a civil penalty of up to one thousand dollars per violation.

How much later on varies, but rehab and repairs until it is in service get capitalized rather than expensed.Just what constitutes "in service" is also somewhat debateable.

You can earn income and get an education.You might be able to start wholesaling with little (not "no") money, but to be a useful and, thus, successful wholesaler, you need experience - you need to know what constitutes a good deal; how to properly and accurately estimate repairs/ARV, what other investors (rehabbers and buy-n-hold) want.

I may need help at the start, but don't necessarily want to be financially tied for the duration of the rental.3) Is it possible to obtain an FHA loan and not rent out one of the units, but continue living part-time cheaply with my parents, or would that constitute mortgage fraud?

Don't let their negotiation stance influence your discipline on what constitutes a viable project.

Each state has it's own laws regarding what constitutes real property so you should study your State's laws closely  and contract accordingly.  

@Ken Wang Do you or anyone else know whether peer street would constitute a 'like kind' investment to complete a 1031 exchange?