They have been tenants for over 4 years (prior to me owning the property).

Could I be entitled to compensation for a new roof since they did not disclose issues with the roof prior to purchasing the home?

@Issac San Miguel - yes they did, however; the actual costs are just so much more than expected.....I am still looking at ways to reduce cost and a prior post suggested looking at this as a rental vs a resale.  

If so, you need to plan your exit from the SBA loan prior to leasing it as a real estate investment.

I would have all that done prior to the appraiser arriving so they are not waiting around for you to get in.   

To me it amounts to a high risk loan, and the vast majority of the risks occurs during that repositioning period prior to the refi. 

I have about $200,000 to invest and I will invest $100,000 with financing prior to quitting my job in 6 months and keep the other $100,000 in more liquid investments so I can jump on the next cycle of foreclosures/housing market corrections.

The issue is you don't have any expenses.Any cost you have to fix up a property prior to putting into service is NOT an expense by IRS rules.

Tax withholdings were well over 110% of the prior year tax liability; so, I am comfortable that the penalties will go away. 

I had the inspections done very shortly after, and after getting the list of repairs, I decided that prior to going forward with this one, I wanted to make sure it was the one I wanted.