Dont forget if this is a co op type purchase/investment you may have to pass a board interview even prior to being considered as a prospective buyer.you would most likely need better than average credit or buying cash, shared loans are provided by less lenders.

Should I be doing a full blown home inspection (similar to one that was done during buying) and fix all the issues prior to renting out?

After the refi I'm now cash flowing and I will reevaluate this again in 5 years, a couple of years prior to the rate changing.

You can also have the lease agreement modified with a buyout prior to closing on the home. 

@Diane G.GFCI outlets are typically not required In bathrooms if the structure was built prior to when the requirement came into the code somewhere between 1971 - 1980’s.  

Trying to decide if I’ll end up making poor buying decisions by not inspecting these properties myself prior to purchase.

I would recommend a PM or read Brandon Turner's book on managing rental properties prior to accepting any tenants, there are just too many ways to end up in an unhappy situation.

The only language I see is:"Borrower will not, without the prior written consent of SBA, make any distribution of borrower's assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by borrower, or any other companies"

Drywall is not terribly expensive - Is it possible to negotiate to have the drywall installed prior to your appraisal?

Seller financed deal at $40,000 bathroom was down to studs, kitchen had no flooring and cabinets were falling off at the hinges, no gutters on rear of home, rear entry door suffered a break in and roof was leaking prior.