Your best defense is to make any repairs that you can, get another inspection done by a good and reputable inspector, and provide both reports to all prospective buyers along with a letter/statement explaining what was taken care of in between the reports.Full disclosure is always the best course in Real Estate.

They can also tell you who has a easier and less problematic draw process and assist you with creating your scope of work.Of course in full disclosure I am tooting my own horn.

I suggest full disclosure to the listing agent on who you are, as they will want to have your deal in hand and make sure your offer gets top priority.

However, the investigator discovered my Brokerage Disclosure form was missing and they nailed me for that.

In full disclosure, I now work at Avail as well (got the job after I switched). 

For the most part, yes, REO's are sold as is and in California, at least, the bank's agent will sign a disclosure stating the sellers have never lived in the house themselves, so they don't know anything about it's history/condition.That being said, I have found some exceptions to the "as is" condition.

In full disclosure, we're in professionals in the real estate industry, so I don't have a 9-5. 

Oh and last question, any information from the realtor/owner/rent roll disclosure on vacancy rates in the past few years or so?

Have some kind of disclosure that the seller signs which acknowledges you are not representing them in any capacity even though you are a licensed agent.

Full disclosure, he's my brother, so I'm a bit biased :)