Don't settle for properties that merely break even; aim for those that generate consistent income from the start.

Even if you pay cash for the property, create a mortgage for the property through a trust you set up so that the property has sufficient liens to keep the bad guys from your business.  

I took some money out of my 401 K to pay back some debts. 

If you're looking to buy value-add deals, a lot of investors I work with start doing BRRRRs with cash purchases and refinancing out so they don't have as many risk factors involved.If your market is seeing any kind of appreciation, I think it's smarter to leverage your money to get the bigger returns. 

My lender just informed me that my seller concessions exceed the relevant closing costs (including points buydown) and that the money left over will be a “wash”.

In essence they want to lease your house, and then re-lease it to someone else for more money than you are leasing it to them for - keeping the difference for themselves.  

I looked for months, and looked at SFH, apts, houses on leased land, mobiles homes and everything that was cheap because I had so little money and had just started a new entry level job 9 months earlier. 

To date, I've always been able to get a better return than the prevailing interest rate by reinvesting that money.

If he does not even fix obvious things, what is he hiding?

Electric Meters: I doubt the even if the ADU is a separate structure they have a separate electric meter as they were mainly used for guests.