The code enforcement officer said he mentioned these issues to the sellers and the sellers' agent.

So legally, you can say 'no' to many of the issues that are brought up during an inspection.

Does anyone see any issues with doing it this way?

Overall, he did a good job, but there are issues that will show up on an inspection that aren't necessarily liabilities.  

The issue you are going to run into if your lender hasn't told you already having the 3.5% is only part of the equation.  

It unlikely calls for a closing/sale without substantial completion, and the bank shouldn't have an issue with funding with a typical "punch list",  perhaps holding back a few grand.  

IF you could inbox me your credit score and credit issues it would be helpful.

The renter might need to be mobile due to the job and possible relocation elsewhere.3.

My default position has always been, "No one will take better care of your property than you".However, here's a list of issues that can force you into using a PM:Out of State - non local propertiesRE inventory that requires too much of your personal timeSpecific properties with a unit count that then require onsite managerIn Calif, (3) the count is 16 or more units, and if you hire a manager, then you have to follow all the employer regulations, which easily adds 35% above the salary. 

Sorry to hear you're running into issues like this.