We have the documents that contractors and subcontractors will be signing including (#1- Independent Contractor Agreement#2 - Final Scope of Work#3 - Payment Schedule#4 - Insurance Indemnification Agreement#5 - W-9#6 - Final & Unconditional Lien Waiver)My question is, how would you guys handle the funds? 

You should also sit down with a lawyer, independent insurance agent and a CPA on the best way to structure things.

Plus it will protect you in the event of an IRS audit.

Also I keep seeing “pro-formas and hearing about getting your own numbers, but shouldn’t you be able to see actual historical audited financials/tax returns before you make an offer?

@David ReinkeI think it's best to start with the Financial Independence Blueprint video course on this site.

These are for sale independent of one another, but do sit side by side.

You doesn't matter what number your put on your tax return. it's when you get caught in an audit that counts.  

So, we look for a product that will attract those tenants, and we work hard to produce that during a rehab.For us, the financial independence and wealth building aspect of real estate is the primary motivator. 

In my quest of researching i am finding a lot of good deals on people either selling their used stuff at a very good price or people getting rid of brand new stuff that they never used due to not fitting or not liking the look.My dilemma is that most of these things are paid by cash so how do you guys keep a track if you do the same and what records to keep so that if/when the audit comes up, i am able to show proof of it.Thanks in advance

Verify their ownership independently.