I have had a few investors who typically flip and sell decide to flip and rent for a couple years then sell to make the most of their investment.

The draw back to these loans is that they are more paperwork heavy than the other "portfolio" types of loans....but if you have ever received a loan on your primary home, it's likely that you will go through the same type of paperwork here with conventional lending.

Wholesalers are typically leaving no meat on the bone for investors, you are correct.

In the process of buying home, the owner received very similar offer, around the same price range however the other offer waved inspection and appraisal.

In the subject to contract, there would be a small down payment provided and then a typical amortization schedule afterward.

Because you are renting out part of your home, you are able to typically drastically reduce your housing expenses, and therefore you can build up your cash reserves so much faster than most people can so you can go out and buy your next property. 3.

We typically use Kilz on all the floors to mask the smell as well before putting anything new down (assuming you are going to carpet or put planks down).  

You do not need to have REPS status to qualify, but it is typically helpful.Here's an FAQ on cost segregation studies that you may find helpful.

Before amending I would ask how much of a return/credit you will receive vs. how much it will cost to amend. 

I'm assuming the spouse is required to work for a legitimate business and receive either W2 or 1099 from that business, but is this the easiest route to take?