Also, he should call his general business insurance carrier and see if it's covered.

A new 400amp service was installed by the Insurance carrier but all the wiring from the old removed panel was deemed scrap by the bldg inspector, in fact a lot of it had been cut randomly by the fire dept., inside broken opened walls & above the suspended ceiling panels.

So things that are a red flag for me may be fine for someone more aggressive.

As in they look at say a property with 3 units and say this is MFR, and unless someone raises a red flag to the legality of the units then it is MFR.

They'll do yearly inspections that require you to fix anything they flag as needing fixed in order to keep getting rent coming in. 

For those of you with experience what are the reg flags on high cost items? 

Even though it might be worthless, the fact that they are perhaps suggesting they will not offer a personal guarantee is a red flag for me.I don’t understand why they would offer that “if the deal goes well maybe become a project manager for them to learn more.”

To the point that when I made the switch from a big direct lender company to where I'm at now, my first potential FHA client (Vallejo IIRC, might have been Stockton) took their business elsewhere because "my" rate (eg, the lender's rate) was a "red flag." 

I’m very interested in their 100% financing option but, as I’m sure you can imagine, see ALOT of red flags.

The fact that this guy isn't willing to ask his clients to give their referral is a red flag.