Professional carpet cleaning, dusting, mopping, scrubbing toilets, etc.

REO list price: 50,000ARV: 110,000Comps: 100,000-115,000Offer price: 50,000Home inspection: $500Closing costs/taxes/fees: estimated 5,500Estimated rehab cost: 20,000Carrying costs: 1,500Loan amount: 55,000Out of pocket cost: 20,500 (down payment, home inspection, closing costs and fees)Loan terms: 12 months @ 10% interest + 3 points at closingTotal cost of house + rehab: 75,500Sell price: 105,000Gross Profit: 34,500REA commission: 5% (5,250)Closing costs: 5% (5,250)GC share: 10% of profit (3,450)Carrying cost: 1,500Out of pocket expenses: 20,500Loan interest: 1,000+/-Loan points: 3,100Costs: 36,450Net profit: -1,550Taxes: loss

Most home inspections carry a clause that they are liable for only the amount you paid for the inspection.

Seller is carrying.

In general flippers shouldn't entertain FHA offers if you're trying to minimize the risks of additional/longer carrying costs. 

Generally a bank will require the buyer to still put some down payment down (~10% minimum) so that they have some skin in the game, there have been local banks that allow 0% down if the seller if carrying 30% or more.Pledge other assets that the bank can use as collateral for the down payment.

@Shaun Edwards - It looks like you're  carrying high leverage overall. 

Take your time fixing it, if you bought cash you wont have much carrying cost.

By all means write your congressperson to tell them it's BS, I'm not a huge fan of it myself, but that letter from a 'voter' carries zero weight if that voter is a mortgage broker. 

Cash for keys rehab all in 4 months 6 month seasoning. 40% vacancy plus your carrying cost for 10 months.