I'm not sure yet if he was on that lease or not.Definitely some red flags here for me.

Do you know if there is a lot of red tape which makes it difficult or is it fairly easy if you meet requirements and lender knows what to do? 

In retrospect, some yellow flags found by the property manager during the tenant screening are now bright red flashing sirens, but the tenant showed decent credit, had a positive previous landlord reference, wrote a charming cover letter in his application, and applied through the referral of a reputable real estate agent.

That seems weird to me and would raise red flags for auditors and I want to persue this in the best knowledgeable way possible.  

Even red states with blue governors can be problematic.  

It's not a one-size-fits-all answer, but hopefully this gives you some food for thought.Whatever path you choose, I'm here rooting for your success.Jasper & PatTurning investment visions into REALITY in Phoenix, AZ - Ranked #1 for residential real estate growth and opportunity by PwC

I would also ask all contractors about how their draw process works (red flag is: 1/3 up front, 1/3 at half way, and 1/3 at completion.  

If a buyer is coming down with a high-down payment and quickly making a large deposit into escrow fighting tooth and nail about proof of funds may be a red herring.Credibility is also a factor here.

This is a huge red flag. 

Check out Red Stick REIA, Westbank Real Estate Investors, Northshore REIA and NOREIA.