I stay away from severely structurally damaged homes and sinkhole homes as these seem harder to sell even when they are remediated properly.

The Texas Flip and Move tv show details significant expenses and damage to homes that are moved.

Then the home owner will stall when an offer comes in.Another downside to a short sale is until the tenants ( home owners  if the case) move out you cannot see all the damage to the property like with  a foreclosure that is vacant.

I would inspect the unit and if it's currently in good condition, I'd tell her that if she moves without causing any damage that you will refund that too.

There is also extensive drywall damage (including some visible mold in one small area) due to roof leaks, some which my inspector feels are active leaks, and a septic water level warning light.I was told by the management company that an OO doesn't have an inspection period (not true) and that HUD will never do any repairs (per their handbook they can repair major--roof, electrical, plumbing, structural, septic--issues at their discretion if previously undisclosed but uncovered by OO's professional inspector and reported to HUD within 15 days, don't know about in practice). 

The roof had a leak and now there is water damage and mold, anyone has recommendations on either fixing/removing the mold ourselves or a cheap mold specialist?

If it's damaged because of something they did then charge them for it.

I have one months security deposit and no damage to the unit that will go toward unpaid rent.

But those type of loans will have high interest rates if you do not meet the requirements it may further damage your credit.

The best way to stop this guy from doing more damage to others is to name names.