As bad as that all sounds, ALL of these issues could have been taken care of before closing and repaired or her buyers could have backed out of the deal.

The house I bought had a strong pet odor, cat urine, and as part of the scope of work, I asked contractor to eliminate that odor, however house was repainted and work 99% complete, but odor came back.

Sounds like an older house . 

When it sounds to good to be true….it is

House hacking is an excellent strategy for beginners, and it sounds like you've done your research and are ready to take the next step.When evaluating your first investment property, here are some key factors to consider:• Location: Choose neighborhoods with high rental demand, low vacancy rates, and potential appreciation.• Property Condition: Assess property condition and potential renovation needs.• Rental Income: Determine potential rental income for each unit.• Expenses: Estimate operating expenses including property taxes, insurance, utilities, maintenance, vacancies, and property management fees.• Financing: Explore options like FHA loans, conventional loans, or portfolio loans.• Cash Flow Analysis: Use a tool or spreadsheet to calculate projected cash flow.Based on your estimate of $300 per month in cash flow, make sure to verify that this aligns with your financial goals and risk tolerance.

It needs to be project by project and they don't get paid a draw until complete.

Am I violating any laws if I'm completely unaware as to whether or not they're on the do not call list?

As work is completed in the house, you can apply for draws for the completed work. 

Does this sound like a good idea?

Sounds like he needs a bridge cash out loan.