I mean damage is already done.

Would this situation cause issues with the loan?

Kitchen has had an active leak- source unknown- that has damaged most of the cabinets, master shower and tub are non-functional, AC unit needs to be replaced, garage door needs to be replaced.

With the State's financial condition worsening, do you think that there should be cause for alarm, or caution in investing going forward?

On 10/26/18 there was a flood in the home (fault of my own) causing damage to the kitchen, master bed/bath (my room), and the main living room. 

They are paid based on damage assessed so the more they find the more they get paid (good for you).

The problem with this is that (1) the deal they think is ‘great’ is probably mediocre at best; their lack of experience and expertise causes them to either mis analyze or exclude information , (2) the ‘off market’ deal they found is not off market, it’s just not listed with a broker, and (3) with no money or experience they don’t bring anything to the table worth an equity position.At best they might be able to obtain a broker fee.

Weather: Cold weather can cause headaches with vacancies and even some differing repairs/expenses.

Will it cause problems with other tenants?

Seller can't - you signed the closing docs before the date stated in Purchase Agreement - so he has to.The PA is a binding agreement and you can sue him for damages.