This seems peculiar to me but I am quite new to this and don't know how I can prove that there were water issues before if the tenants that are there now claim that this is the first time they've experienced it in the 1 year they lived there. 

I would suggest you study all the free youtube videos that Del Walmsley has.

I had some stuff going on at home and had to leave but it’s okay i know life happens and I’m handling it very well. I’m just looking for some advice to get out of this situation I’m in?

I am studying for the NMLS SAFE exam to obtain my license as a mortgage loan originator.

@Tracy SchultzIf you feel like you have spent enough time analyzing and studying/getting to know the market you are in, start writing offers on places.

I have prior experience working for a real estate title company in South Florida, a degree in legal studies and had advice from my professor during a real estate law class when I bought my first auction through Broward county (realforeclose). 

I don't know if I can even prove the issue is due to the hole, but that is the only logical place the water can enter at this point.Has anyone encountered this type of issue? 

Study, Study, and Study.

Sounds like you are already aware that you need 2 years of tax return proving self-employment income - no traditional lender is going to accept bank statements.

If you didn't see this dead tree when you inspected the property then how could you ever prove the sellers knew the tree was dead?