When looking back on the project, the one thing we felt we never fully controlled or could put our arms around were construction costs.

They can definitely be rented - no issue with that, some are being sold as rentals.Besides the lease, the other issue is that an approved lender told me investors need to put down 40% and she only had 5/1 or 7/1 arms available.

(My realtor said this does not qualify it as a bedroom and could be a safety hazard?)

We recently were pre-qualified for a 5/5 ARM 20% down, offer made and accepted on a 2 family, inspection completed and accepted, attorney's are involved etc.

Something like "Buyer will increase his bid to exceed the highest bonafide, valid, arm's length offer by $1,000 to a maximum price of $XXX,XXX. 

If you're not going to have a contractor or building official involved then I would leave it to the property manager to point out obvious code deficiencies especially concerning safety issues like fire / smoke / CO detectors or railing height issues.

This is about your other tenants safety, your safety, and protecting your liability.

They each protect you from different aspects; however, the appraisal and loan contingencies are very specific in what they cover whereas the inspection contingency provides you with a more generic safety blanket.If you're getting a loan for the property, you absolutely should have enough time to have another inspection completed before you close. 

The inspection is really just a safety inspection.

Must be arm length transaction.