The job of the inspector is to provide the person paying their fee with a report that tells them if the property fails to meet HUD standards.

That is why something over 85% of new agents (residential or commercial) fail within their first two years.

You will fail in this business.

What many fail to account for is the human element in this equation.I believe there are degrees that can be beneficial...if someone is intentional.

One close person to me spent over 30 years studying and never pulled the trigger on an investment out of fear of failing. 

However if you fail to provide these things that might be the only thing they remember.

One buyer was out of state like yourself and didn't like the fact the seller failed to disclosure some repairs.   

Question about hard money lending (considering having an exit strategy is #1)...Say the deal goes south for whatever reason and our exit strategy, or strategies, fail (worst case scenario) - does the HML take the house in a foreclosure scenario or what happens exactly?

Same fail. 

If the inspection fails, I cancel and allow the seller to get the property back on the market quickly.