That is a huge red flag.

Not to be condescending but you should have known this before your investor asked you this question .. if I was looking to invest with you .. this would be a huge red flag@Brian Burke  Brian do you do a FAQ up front in your primer that you may give to investors prior to them seeing the final offering docs ??

A huge red flag goes up if they say "I have the cash now" -- -that means they don't want you to check them because they know they have bad stuff on their record and you won't accept them.  

JL Generally speaking an upfront fee measured in 1% or more of the purchase price or loan amount is a flag for a scam.But $500 looks like an appraisal fee.

IMO the fact that the contractors and FHA consultant are saying the things they are saying should be a huge red flag.

BIG RED FLAG if the owner will not allow an inspection.

What do you suggest to look for and what are things that should be a red flag?

These items all affect the risk ratings that carriers use to calculate the premium.

The fact that they work with people like that should be a red flag.

I wonder how it will affect insurance, the local law might say you cannot refuse a large breed dog, but some insurance carriers won't cover you because of said dog breed.