When he put it back up on the market it lost its mojo and everyone thinks the deal fell through because there is something wrong with it.

Make sure to dispute anything wrong on the reports which will also help his score.

I do not think the 50% is supposed to include insurance and whatnot but I could be wrong. 2k falls short of being 2% total cost though.Do you guys think this is a bad idea??

If this is the biggest thing wrong the the property, is that a deal breaker?

However, when you start getting into larger commercial properties I think you want to have an S-corp formed (but I could be wrong!). 

I found out that this was the result of robbery gone wrong.

I may be wrong though.

Regardless of who is "right" or "wrong", if the tenant/landlord relationship has deteriorated to thinking of terminating before the tenant ever moves in, then you as a landlord, and they as renters are just not a good fit.

Everything started off well, but then just when we thought there was nothing else to go wrong, something else would.  

Just take their word for anything that might be wrong with the property.To be a little less abrasive, look at it as a simple numbers game, is it worth the $400 to have someone who is working as an agent for you to inspect a $100K Home?