I notified my attorney to make sure this is addressed - either FNMA has to pay it off or we need to have funds set aside in escrow for it.A few days before closing when all the emails are flying around between the closer, my attorney, the agent, about all the mistakes in the title commitment and HUD-1 etc...I raised the outstanding water bill issue again. 

My mistake, I didn't read the original post carefully enough.

You don't want to make a mistake with the woman's funds.

That was my mistake. 

My personal mistake was not pretending to be a tenant FIRST to see that it's non-existent in mine.At any rate, I wasted a larger chunk of time on there than I expected, but at least I learned something. 

Mistake? 

I guess my thinking is to do it as quickly as possible without rushing and risking making costly mistakes.

All you need is a small mistake in your renovation numbers & there's no profit;  possibly a loss.  

I seem to have an opportunity to expand into Hard Money/private lending here in Colorado Springs and I am looking for some pointers to ensure I don’t fall into avoidable traps and beginner mistakes or become victim to scammers.I have my real estate attorney on my side and an attorney friend who both have experience writing hard money contracts.

I suggest you learn as much as you can so you don't end up making huge mistakes with your hard earned money.