It must be significant, latent, unseen, not obvious, uninsurable title would be a good reason, an inspection report that mentions the place is about to fall in due to wood destroying insects would be a good reason.

Also, the option period in Section 23 of the standard Texas contract is a "any reason or no reason" clause. 

You won't be making payments to the investor and the money is trapped.  

When you are more knowledgeable on how to handle leads, advertise on radio and TV (call me for help here)The real estate business is a great business, full of traps, stops and negatives, listen to only those who have a proven track record, don't get involved with slick talking folks who want to up sell you something.......... take counsel from professionals.

Just remember, Indianapolis is a city where one street has perfectly manicured lawns and houses above $400k and literally the next street over is nothing but run down sub $10k burnt up trap houses.

Currently reading Tips & Traps for Negotiating Real Estate by Irwin and also Mortgage Ripoffs and Money Savers...

To me, it definitely looks like termite (or some other insect) damage...That said, I'm far from an expert...

Do NOT fall into the trap of thinking owning rentals is financial freedom.. if you get to the point of having enough dough coming in for you and your partner to live in Honolulu ( expensive city) you will work for it... there is no illusion that running a bunch of rentals is mail box money.. at least to do it and be successful. you will change one job for another.. and many people dig being landlords..

(Some mortgage companies may require a wood destroying insect inspection/report, though I have t run into one yet)

I got her some traps.