How common is it for title problems to arise on an REO property such as this?  

Larger properties can yield a bigger check faster; however, they could be more difficult to contract (depending on your knowledge and resources.)You probably know that having a Real Estate Attorney on your team is KEY, to handle any contractural issues that may arise.

Negotiating with other agents myself gave me more control of the transaction and when situations arise, as they always do, I was able to provide a delicate or firm hand as necessary.Being a real estate agent may not make anyone a better investor but it provides more insight and control into the acquisition side of investing. 

However, should the problem arise again I know have resources at my fingertips!

You can do it yourself, but a title company will make sure those items are cleared before or at closing.Title insurance will cover you for any problems that may arise with your ownership of the property after it is transferred to you.One example of where title insurance helps is fraud.  

Need to know that as the matter will usually arise again as a LL

I have been waiting for an opportunity to arise that I can put forth some real effort in to and be successful in and I am positive that this is it!!

@Jeff Tumbarello As this will be my first flip, I'm looking for a margin of 25-30% between total investment and ARV in order to pad myself from any unforeseen expenses that may arise.

I have never faced this situation and I'm sure it will arise one day.

Any issue that arises is going to be a Landlord Said vs Tenant Said and the judge is going to rule in the tenant's favor - this is a professional tenant's dream.