If it were me I wouldn't let that crack stop me from buying it...only lower the price (double) to compensate or the cost to fix it. 

The trick is finding houses that have issues where you get compensated over the cost of repairs/upgrades for most of the upgrades.  

If people are going to pay late, I'd like a late fee to partially compensate for the risk and extra work.  

(And 6 months is unusual, it's usually the very next month.)That being said, Jon is on the money, but if you want to take the risk, make sure you're being compensated. 

I would offer a low enough amount that was compensated for the risk.

Also, it provides me the opportunity to work with buyers and sellers in a fiduciary capacity if I want to (which sounds like you are interested in doing) and get compensated for listing referrals I make to my agent partners (on houses I cannot wholesale) and other buyer referrals I come across.

At the end of the year, the shop has a $40,000 profit, which the owner takes to compensate himself for his time.

Hi Anthony, most of the asset management companies look for you to be insured with general liability insurance, errors & omissions and workers compensation with limits of liability $1,000,000.

How would they get compensated?

Banks and mortgage brokers get paid on a % of the loan amount so they do not like to do the small deals (same amount of work for very little if any compensation).