We hit one snag so far, when we turned on the water we discovered water pouring into the garage from the bathroom above.

(non working outlets, automatic garage door openers, toilets that take an extra flush, closet doors that come off the track ect, fireplace not working...)

Recently my investor friend being for water intrusion to the garage which he has no knowalege of.

The property has a detached garage and 1/2 a house.

The bank didn't shut the door, just said "Let's see where the appraisal for the LOC comes in on your primary residence."

They wind up being either unusable space or just storage since today people want a door on a bedroom and dont want a walk through bedroom for lack of privacy.

Sounds like an encroachment that should have been caught when the house was built, look up adverse possession, you may not be due much if anything.I suggest you take what they give you as it doesn't sound like you have much of a financial loss if your home is far enough away to be marketable, I assume you bought the house with the house next door.

Demand they do or allow you to or2.

Having the credit check in place and screening out poorest credit buyers helps too but if they could get a conventional loan they might not be knocking on your door for a deal anyways.

The down side is it is thrashed and there are no tenants staying there which makes it ripe to go in and take electrical and plumbing which will happen if you do not secure the property (doors and windows) immediately.Good Luck on recovering any money from that PM.