If his calculation for rehab/remodel is off, market pricing and hold time, or inspection for red flags is off, it eats into his profits.  

Whether you drive for dollars looking for tall weeds, red tags or blue tarp roofs, you have (I presume) a house that grabbed your attention due to some physical aspect of the property that's out-of-character for the neighborhood.

It can still be done, but it requires a lot more red tape than most other states.

If the owner has every red cent of the defaulted monies with all fees and throw in a $1,000 bonus the bank won't accept it now. 

Large debts are a red flag, but irresponsible use of credit is the larger concern.

Here is an excerpt I found on their startup page on Angel.co:TrueAccord uses behavioral analytics and personalized messaging to get late and delinquent customers to pay up, recover and come back to being paying customers.TrueAccord automatically: - Collects publicly available data about debtors to create a rich dataset teaching the system how to approach them - Communicates with debtors via multiple channels - Uses a process designed according to latest behavioral economics research to negotiate with them and understand the root of their inability and/or lack of willingness to pay - Manages the payment process - Presents insights back to the merchantTECHNOLOGY- Complementing debtor profiles with online crawling inspired by Israeli Intelligence Forces' technology, bringing together sentiment analysis, social data and more. - First ever automated negotiations engine working on debtor objections in real time, employing behavioral economics guided U

I am rooting for you getting those flips really soon!

Is he a lazy wholesaler or is there something that brings up red flags once you do your due diligence?

We were able to ferret out a family of Professional Tenants yesterday after picking up on few 'red flags' on their applications. 

The AUS is a hardcoded system that will initially put the file through the wringer, detecting any red-flags & criteria discrepancies that the borrower will have to be responsible for before receiving any credit.