I conducted inspections about 5 or so months ago with no problem and did have him do a walk through inspection form 6 years ago prior to his move in, but after his "friend" moved in the tenant/landlord relationship quickly declined.

(I recently had a buyer back out because they found out that sheds were not allowed per HOA CCR's)If you reserved the right to have a survey conducted, you may be able to terminate the contract if something shows up on the survey that is not acceptable to the buyer (a drainage or utility easement that was unknown, a fence that is over the property line, etc.)Deals can fall apart over financing, as well.

I can envision a scenario in which many of these properties in vacation communities convert to LTR, as they are not a primary residence, and the tenants conduct illegal sublets through craigslist, friends, etc. 

How would you conduct a background and credit check on a foreign citizen.

But you should have been advised FHA 203K is extremely tricky with you financial institutions that are not conducting these loans often.Let me know if you have any questions.Regards,Joe Scorese

It would seem odd to have an appraisal conducted after making an initial offer.(2) Relatedly, when should I have the property/home inspection performed?  

So, I wonder if I should set up Texas or Wyoming Series LLC for holding the rental properties and then set up a Washington State LLC for the operating side (conducting rental business).  

@Vitaliy Merkulov Important to take the time and conduct the due diligence on the front end to avoid problems on the backside.

Each tenant would have a separate space/discrete door to conduct business.

@Jeremy Basiger  it just sounds like you do not have an established relationship with this agent, and I agree, a iphone photo of a bank account is not enough.Those that conduct themselves in a professional manner will get that treatment in return.