But they are getting FHA loan and a large credit will get flagged so the solution offered is a escrow holdback. 

This is a red flag to me as if he doesn't even have general and workers comp insurance, I would not trust that he would go through the proper process of pulling permits and anything else that is required to do the job within the legal scope.

That alone is a flag to consider; to be aware of potential systemic bias.GPs who subscribe to ALL the "standard" fee types are a flag.

Purchase price: $313,992 Short-term rental in a gorgeous two-story home just minutes away from Six Flags Fiesta Texas, La Cantera Mall, and The Rim.

I've tried a lot of them:My own Free99Free one for 7 yrs using a SamSung Phone & a GooglePlay app (can't use it cause carrier's will flag you down, shut off ur phone every other day)REIReplaySlyTextBatchLeadsFlipster - Just recently tried it out using their "7day trial period" and it SUCKED!! 

Lots of red flags here.

They might have a valid reason out of their control.But if it's previous landlords who have filed against them, if it's previous utility companies who have filed against them, and if it's failure to make car payments, those are generally red flag adverse actions.

The tenant isn't what I would consider the stereotypical bad section 8 tenant, so on the surface of it all, I don't see any red flags that would push me away. 

It's not the "red flag" that other arrangements can be as a loss payee can be for another lender or lien holder.

If your existing blighted property has not been flagged by the city, it will soon...its inevitable...not to mention rising property taxes on a property not generating revenue.