But if you get paid a success-based fee for uncovering leads, then it is not the same issue. 

My thought process is to direct mail, geo-target, cold call, etc just like I would to uncover wholesale or flip opportunities.

So many variables and hidden costs, you will not know about until the uncover themselves, one by one.

I have no experience with this... just passing it along.A quick search of the boards will uncover a number of other posts asking the same question as well.

I know that we need to look at obvious needs for repair, get both income and expense statements, copies of leases, etc. and that we should have a professional inspector to uncover any potential surprises, but before even all that, is there anything in particular that you are looking for that you consider immediate red flags when you assess your investment options?

Hopefully you can uncover the truth.

What would be interesting is if through these regulatory reviews, a number of Sub2s are uncovered. 

Sorry to hear about the issues you uncovered however I am on the side of its your mess to deal with now.

A simple google earth drive down the street will uncover that.I have 17 rental myself and if the homes have gutters, I will keep them if they are in good shape, but I have removed quite a few over the years as the house naturally drains fine and the amount of trees on the lot constantly fill up the gutters.

Good job guys on uncovering these dirt bags.