It's worked for about 10 years and counting.It's a multi step process.The risk is that if you have rust on the attic side it will still rust through no matter what you do to the side you can see.

For a lot of first time buyers this approach seems too risky, so it's not really something you talk to them about unless they are short on closing costs at the last minute ("FHA is 3.5% down right? 

All they have to do is pull the trigger on getting you the money (although rarely will that be the case).In my experience so far, anyone who is putting their money at risk is going to be doing some due diligence of their own.

If free, what is your value proposition?

For your first one OOS would be scary and risky.

Risky/safe, commercial/residential, inexpensive/expensive, fix-up/move-in ready.

I understand why it's easier and and less risky to dismiss the offering outright but you may be missing out on the potential to make more money on a "start-up" because that's what many of the offerings are where the sponsors aren't co-investing.I have a substantial amount of capital tied up in a number of rentals that my business partner was adamant about not selling.

The first purchase is always the hardest and most risky.

If you don’t have reserves available to cover unexpected emergencies like replacing HVAC (~ $5K), then it could be a risky deal for you   2.  

Could someone please explain why exactly it is especially risky?