I would say if all mechanical systems are working, there's no leaks, and some sense of integrity in performing the work: then someone could potentially be ok not completing all the fixes required to make a place market ready and rent for cheaper.

Forgot to add, they do not meet International Mechanical code, therefore i believe you would not pass any inspection for them.

Based on the year the home was built, make sure all of the mechanicals are in order and that there is no lead based paint.

The house is in good shape, needs A LOT of cosmetic work and some mechanical work.

I am a 29 year old Mechanical Engineer by degree and a Robotics Engineer/software programmer by trade. 

If so, then it is what it is and is long done.If by some mechanism you were able to take the funds without that being classified and reported as a distribution (unlikely, but possible), then you have a bigger issue and should consult with your CPA as to how to fix the reporting and pay any necessary taxes and penalties.... 

Are the mechanicals (furnace/boiler/water heart/appliances/etc) of the property sound or are you going to be making an investment in these in the near future?

Some mechanicals 20 years old though, so in between on condition.

I recently graduated college and started my career as a mechanical engineer and have recently decided that while I love my job I don't want to work for the rest of my life, and real estate investing makes the most sense to me in order to gain financial freedom before I turn 60.I have been reading a ton of real estate books and discovered the bigger pockets book on rental property investing which gave me a great introduction to all the topics and possibilities in real estate.

If the mechanicals of the home (plumbing, electrical, roof, and HVAC) are all centralized to a single unit, I think your home inspector stands a much better chance of spotting an issue as opposed to a multi-unit with multiple independent systems that may or may not be accessible due to tenants.As for closing costs, try to push the closing date until you have the funds available?