Some are shady and most of the deals you'll come across will be terrible but with volume you can find some pretty good deals. 

He then sent me other properties to fund (each one he sent me were terrible properties that no investor had any business funding. 

Sold those two buildings to the terrible partners then tried a third deal that went badly just due to dumb luck and quit REI for the next 20 years.

Most of these wholesale deals will be terrible, but you will find decent deals occasionally.

He basically did demo and some terrible electric and tiling then left; he stopped responding to any and all communication.

It’s a terrible idea IMO: more deals will fall apart for petty reasons and more buyers and sellers will decide to sue each other, transaction costs will go up. 

Doesn't seem terrible. 10.7 % return on the down payment.

I've had broken windows, paint, and plumbing items flagged for repair but never stairs; although I have seen some really poorly constructed staircases and it's not terribly surprising to me that something like that could get flagged.Ultimately It's negotiable with the seller, although you should come to terms with the fact that you're an FHA buyer, and the seller would not have this issue with a conventional buyer; it entirely depends on your circumstances whether this is actually something the seller should pay for or not. 

@Ricardo Fainsilber In my experience, servicers range from mediocre to terrible.

No offense to the other posters, but this is all terrible advice.Terminate the lease and get rid of these tenants!!!