Issues like peeling paint, broken windows, outlets/light switches uncovered would not pass inspection. 

@Joshua Strickland your dollars are not losing as much value as if you are grossly overpaying by a $100k or more for a cabin.Never overpay for RE in hopes that rents and higher occupancy will rescue you from making a flawed buying decision.

It seems like a design flaw to have a camera that can be so easily defeated. 

Apply the deposit and refund the remainder or charge them for any uncovered expenses.

But back to original comment, if things are moving forward, I would lay out that you would love to stay involved in the deal with an ownership stake for uncovering the deal, and then let the conversation take it from there.

Plus, I live in the Hudson Valley, NY area, so houses are pretty expensive to begin with.My question is: Is my plan flawed? 

Or we are all wrong and modern economic theory is flawed and no longer applies...

Any computer algorithm is going to have flaws.

And remember this is only one of many possible strategies and there are sure to be flaws/cons with this that I missed but I thought like it sounded like it might help you reach you goal a little quicker then other methods. 

At some point you’ll uncover a good one.