So the goal is to look for any major (deal killers) that would affect financing or profitability of the property.

In this deal, it sounds like the other party found the deal, is bring the rehab skills and will be making the decisions on what value to add to make the most profit (the experience). 

An issue like that might be tackled more appropriately by a non-profit rather than the govt. 

Profit in real estate comes from cash flow, appreciation, and principal reduction....use IRR to calculate profit. 

The reality is that house flipping is much more lucrative and profitable for me, but I still like listing houses for sellers.

We made some profit in this transaction.

My husband and I were full time investors for 8 years before we got into wholesaling.What's tough is being able to buy deals cheap enough that you can sell them to end users with enough profit left for your buyer to rehab and still sell at a profit for themselves.

We’ve run the numbers and think even worst case scenerio with the house we could turn a significant profit; however, our realtor is advising us to walk.

So the total gain divided into profit and depreciation is carried forward. 

And I am sure as we get more and more properties, then we will be less able and less inclined to do those things.But end of the day I think a little bit of compassion goes a long way to maximizing profits.