I would not play with fire when it comes to failing to disclose.   

@Jeremy Willis - most of the salespeople / “coaches” at a recent one I went to either weren’t landlords or had failed, been foreclosed/bankrupted in the past.

Anyone do this before and fail?

The pump was on it's last legs anyways so it wasn't a huge deal as I was planning on replacing it but it did make a mess downstairs when it failed.

I got a letter from a pro bono attorney they contacted stating that they want to avoid court and can stay in the unit for up to 60 more days because we failed to give the written notice– is this true?

You can offer ~ $200 DDFee.You can offer to SHORTEN the DD Period( if the water/power utilities are on , see how fast your home inspector can get there for a verbal pass/fail to you ) To be followed by the written report --BE THERE ON SITE DURING THE INSPECTIONS.Really you have to see what the seller will accept.

Set your metrics and your pass & fails, then once it all checks out don't hesitate to pull the trigger and TAKE ACTION!

And its a water heater, they can fail at any moment.

@David Morad go an acquire more deals, the information is there, where most people fail is in taking action part, get yourself around great people who will encourage you to do more, set your goals bigger, keep learning and keep getting out of your comfort zone.

If a person fails, they have to take 6 weeks of counseling and blackballed for a year.  2nd failure is a year of counseling and 5 years blackball.  3rd failure is lifetime ban.