I look at this and think the logic is flawed.

If you can uncover thier problem then you can offer a solution. 

You have to uncover those yourself. 

Is there benefits/flaws to both?

I've very successfully renegotiated the price after inspections uncovered issues.

(then wholesale the home to a buyer/investor or seller finance it myself with a partner)IMPORTANT NOTE: At this time, I do not know where the cash will come from to purchase the home, but I know I can find that easily.My biggest struggle right now is creating a deal that makes sense for everyone in the transaction.Any creative ideas, tips, or flawed logic behind my idea is more than welcome.

If you uncover any concerning issues you can go over them with the applicants before signing.I'd also recommend going through the lease, explaining any important restrictions and the penalties.

We put it up for sale on Craigslist for $300 a couple days ago and had someone pick it up today and buy it for $250.That made mew think that with all of the active investors we have here on BP, some of you must have some cool or not so cool "treasures" you uncovered while rehabbing homes. 

When a buyer sees one item then they will start to really pick things apart looking for more flaws.

Brendan, you have the basic concept, well done, but as Johnny points out, a bit flawed, but the principles are there.