I looked at their home and its a beautiful 3/2 in a great area and has great potential to buy & flip or buy & rent.  

I have no idea if the claims are true but it was a very clever action taken by the tenant.

@Ned Carey, That's true.

For the first one, that is probably true.

He is trying to sell it for far higher than the true value and pretending like he just doesn't want to list it.

This is not always true but true enough to be cautious.By virtue of being "distressed" properties will have all kinds of issues including liens.

And is it true that you don't need the traditional 20% percent down these days?

Sometimes it's limited by the SPD, other times you can invest in ANY thing the brokerage offers (their interpretation of "self-directed).A true self-directed account is held with a custodian who invests the funds in the account as YOU direct (hence, "self-directed") and investment are options are only limited to "any investment which is not a prohibited transaction".

Absolutely true about a property management company.  

But again, this is true in ANY business- some of your leads or foot traffic or whatever are going to convert and some will not.