Plus we have bugs of all sorts that insist on coming in the house. 

@Chris Vacek We have all sorts of Yankees moving down here!

And then all the wanna bee's that can get into title on a house for next to nothing.. its ripe for all sorts of problems..

I've heard if investors paying maybe $5-10 per lead, where a lead is somewhat qualified... maybe a vacant house with no sign in front, that sort of thing...any thoughts??

Most commercial lenders will offer some sort of rehab loan. 

We have since connected, Jay explained what they are doing behind the scenes to me over the phone, just as described above, he has offered to give me weekly progress updates via text, and I'm optimistic that this will get sorted out soon. 

If you don't have the down payment for that, the right thing to do is move into the property just like you are going to promise to do, or walk away from the deal.Note that you can move into one room and rent the other ones out and that sort of thing if you purchase it as a primary residence.

If you want to try with any sort of conventional funding, discuss what's happening with your broker and underwriter and be sure they know what's happening and are OK with it.  

There are ways around financing requirements, however it will depend on what sort of loan you're looking for.  

That is strictly prohibited and I would not put any of my licenses on the line for a real estate transaction or a commission of any sort.