How common is this phenomena? 

This could possibly be a factor if you did want to take the road out (assuming you can) but you'd need to get an attorney at that point.2- This is considered an alley btw and is very common for it to be used in the manner you described.

Your rental house will look, smell, and sound like that within 1-2 months of them moving in.Now let's look at the common excuses for not doing this and how to solve the issue.1) What if they don't live in town?  

If you don’t know what to ask, you can find a list of informed questions in this post: Questions for Hard Money Lenders.In your case, I would also be prepared to explain your business model since condo hotels are not particularly common.

In my location this is not common as most low income people can't afford the 100K to 120K house and if they wanted to move into another location they would have to travel at least 25 miles out.

That is the common insurance structure we use when rehabbing properties here in Connecticut.

Employment centers are starting to follow."

This is common in a short sale situation.

Are there any logs that are rotten or insect-infested (this is can be especially common with the sill--i.e. bottom--logs)?

Does your HR department verify employment and income, or do they source it out to companies like the work number?