This doesn't seem to be something that a tenant would normally threaten a lawsuit over.Is her concern really about safety?

Very few on BP like that because they believe the can find a better deal or better syndication themselves or prioritize some of the tax benefits of owning.

For your safety I would complete a background check on anyone you consider working with.

If you take it to the next step and get the building permit as an architect that actually opens you up to a lot more liability because it is your life safety and waterproofing details now on the plans.

Unless he's independently wealthy, he still needs to work, so what job is he going to prioritize: the one that's paying the bills now, or the one where he might see some possibly positive outcome later? 

But I spoke to him on a regular basis or by weekly and he said he ran into other properties that were more prioritize than this one.

If yes, this safety net will help take some of the stress from your decision and help numbers, not emotion, guide you.

The seller wants to sell the house AS IS which I completely understand and have all of the tools, skills, and resources to fix these issues but according to my lender, the loan would be "subject to repair" meaning that the seller needs to at a minimum fix the safety issues (which they do not want to do).

The main takeaway I'm getting here is to prioritize having the money lined up ahead of time.  

Last week, we conducted inspection, sent a response to inspection asking for some updates on a few safety issues.