The deal is going to be too small to eat the legal costs.

They may be over charging for maintenance and other items which will obviously eat into your bottom line. 

Good chance you’ll get stuck not being able to sell and holding costs will eat away all your profit and then some.

From what I've read in David Greene's "Long Distance Real Estate Investing", some property managers may charge a fee for every new tenant (like half of first months rent) and this would eat into my cash flow.

Things like closing costs to buy, closing costs to sell, agent commission to sell, seller closing help for the buyer, financing costs, carrying costs etc can eat up a lot of the gross profit on a deal.

Tenants know when they are getting a phenomenal deal  and often (in my experience) will just eat the increase because they know there's nowhere else to go as cheap. 

My husband have been linked up with lenders by some wholesalers we liked in Cleveland, but they would be eating into our cash flow with the terms they are setting.

And if the accumulated losses are greater than the RE gain, it will also eat your capital gain from stock sales.That is the long term strategy of using your losses much later when you actually need them. 

IMO the transaction costs to pull 40k seem like they might eat a chunk..... i would wait and save esp since seller wants to wait in any case.

Hiring a lawyer to perform these tasks you mentioned is overkill and will needlessly eat into your spread.