@Avi Lah99.99% of these you will have to bear these costs as most states are buyer beware and the seller may not have known.If this was done to my house I would have had no idea as I bought it the way it isAlso an attorney to pursue this will cost you more than the fix and again you would have to prove the seller knew about this and willfully withheld it from you.

I brought up the idea with my friend that he does the same thing, and we pool our money together.

I've started building a spreadsheet for myself and wanted a few examples for Ideas.

I would reply back "how can we put an offer in if we have no idea of the condition of the home".Are these properties that are listed on the market?  

However, if it's not, a deed will probably need to be obtained from the proper parties.Keep in mind the title insurer is only liable for the amount of insurance you purchased so you may be self insured for any additional value. 

I would allow it only if you are properly compensated for it

Most people suggest finding an independent agent who can shop multiple carriers as the best option and that is a good idea also but know that some Indy agent's don't want investor business so I'll say it simply Indy's are great but not all Indy's want your business. 

Some ideas would be to: Take a look at a market report for Pittsburgh and add a few percentage points to be conservative, Call around to multifamily brokers or property managers in the area and ask their vacancy rate, asks banks what their vacancy assumption is for underwriting, etc...

Also I've been doing a lot of reading on this, but would love to hear any partnership structuring ideas and tips.

They mostly just want to see most recent bank statements to ensure you have proper funds for the down payment and portion of the rehab budget to start out prior to requesting your first draw.