I am hoping to communicate with the 2nd position private money lendor that I want to pay them in a lump sum at the ens of the deal and ask them how I can make that work for them and make them feel safe.

This answer should continue to drive your choices as you invest.

But they said they still have fleas.At this point, I feel like it is fairly safe to say that they brought the fleas in with them or at least their cleaning habits (or lack thereof) have contributed to the problem.Anyway, my question is who is ultimately responsible in this case? 

I paid the full amount and the house has a beautiful and safe pool. 

Fortunately, my GC calls the next day; he has been in the hospital with a blood clot in his leg (from driving cross-country on vacation).

The value of the house before the fix etc is less than what I'm lending.My question, is it safe to give the loan to an LLC the guy have or should I insist giving the loan directly to the guy?

I have even started driving by places and taking a look. 

The first pillar is avoiding unnecessary and risky activities (don't drink and drive, insurance generally wont cover your poor decisions) and take good care of your investments - these simple steps will help you prevent lawsuits before they even occur. 

So, city employees are essentially driving the $ invested in homes going on the market, not the homeowner and/or the Realtors, both of whom are FAR closer to understanding what the market wants than most inspectors. 

Then you got a safe place for people to live and know what your up against cost wise .