They have more skin in the game then you do.Make sure you get clear title.

That said, we are fortunate to operate in a market where, despite those cost-centers, all parties involved can still end the year with a healthy ROI after expenses.

Return (at least for me) has been very healthy equity increases. 

As an investment property specialist and investor myself, I started to search for a  new model that would allow us to provide our investors a healthy return while being able to return their capital.

Point of me saying all this is with what I purchased it for and planned to do with it I knew I would have a healthy margin no matter what I found that a home inspection and my inexperience missed (like bat collony in the attic, termite damage, or water damage...all found and resolved).

There are options you can request for a buyer to have more "skin in the game" if they decide to back out.

They have more skin in the game then you do.Make sure you get clear title.

I found a legal duplex fannie mae foreclosure, got approved for a 203k, and bought the duplex, rehabbed it, and by the time the rehab was over, I was able to build enough equity in it to refinance out of the 203k, and now I rent both units for a healthy cash flow. 

Anything less than that, and you're increasing your risk, as your seller will not have enough skin in the game.  

And the same thing with projected returns.I'm an accredited investor, so I usually don't invest in the nonaccredited funds because many (although not all) of them have such high fees , low skin in the game, etc..