They spent 1K on them from upwork and it helped resolve concerns in the meeting real time with some neighbors had who were just picturing the project their own way which was completely different than what the emerging developer was proposing. 

Can't you come together and figure out a solution where he returns and addresses your concerns and collects the $2K?

I understand your concerns.

My main concern is whether it's hard to meet their criteria for properties and secure funding.

For more explanation of what they are feel free to read the many threads on Bigger Pockets concerning them.

Unfortunately, I tend to agree that they really are not concerned with whether or not you have to cancel bookings. 

My concern is whether the city could deny permits for these modifications, such as removing walls or converting a garage, or if they are mainly just concerned with safety and habitability.

When you see what people do with old space heaters, guards and safety removed, plugging in several in one overloaded extension cors,... you can see where the concern is coming from.

Though the property and surrounding areas look nice in the pictures, the doors and windows has bars which concern me.I am just starting our my RE investment journey and all help is greatly appreciated.

Why I am leery of these "creative" things for people with little to no money One of the concerns of going to fast is over extending beyond their resources.