If this will inevitably happen to your building you may want to get those guys in there BEFORE you buy it so you use any deficiencies they find as negotiating fodder.

This is a very common "deficiency" in older homes.

The investor should have the knowledge to inspect the home inside, above, below, inside and outside to translate from deficiencies to repair cost at the time of initial purchase offer.

No home is perfect, and there are reasonable items  and deficiencies, to address, but remember, the seller has zero obligation to do anything.

I have a colleague I've known many years who has a number of defaulted California 2nd trust deeds Fact is they were cash out 2nd mortgages on investment properties,,they turned into bad deals ,borrowers went thru foreclosure but have not declared Bankruptcy.These are California properties .Some of the Notes are 9 years oldI have been pursuing Judgment Enforcement for the last 6 months with moderate success In a word ,Id like to help my friend collect on these 2nds that went South Its my understanding I can pursue them as a collection and if that fails ,hire an attorney and create a deficiency judgment ,At that point I can request an Assignment of Judgment,represent myself in court and collect on the debt Is that accurate? 

Again, given existing constraints that contractors and materials suppliers have had to comply, not including possible changes in compliance which can take place by surprise events any given time, (minor material deficiency or contractor's burden however minor of an incident, and that this could be beyond contractor's control) can escalate and could lead to project slowdown up to project cancellation/project shutdown.

I came across what looked like a deal 2 weeks ago but my planning has been deficient when it came to financing.  

The inspection issues are just going to come up with the next buyer so just walk away and who knows, maybe they will come back to you.I wouldn't go scorched earth on the owners either and tell anyone who will listen about the house's deficiencies either. 

This subsection does not apply to a lien or encumbrance placed on the property that is:(1) placed on the property because of the conduct of the purchaser;(2) agreed to by the purchaser as a condition of a loan obtained to place improvements on the property, including utility or fire protection improvements; or(3) placed on the property by the seller prior to the execution of the contract in exchange for a loan used only to purchase the property if:(A) the seller, not later than the third day before the date the contract is executed, notifies the purchaser in a separate written disclosure:(i) of the name, address, and phone number of the lienholder or, if applicable, servicer of the loan;(ii) of the loan number and outstanding balance of the loan;(iii) of the monthly payments due on the loan and the due date of those payments; and(iv) in 14-point type that, if the seller fails to make timely payments to the lienholder, the lienholder may attempt to collect the debt by foreclosing on the lien and selling the property at a foreclosure sale;(B) the lien:(i) is attached only to the property sold to the purchaser under the contract; and(ii) secures indebtedness that, at no time, is or will be greater in amount than the amount of the total outstanding balance owed by the purchaser under the executory contract;(C) the lienholder:(i) does not prohibit the property from being encumbered by an executory contract; and(ii) consents to verify the status of the loan on request of the purchaser and to accept payments directly from the purchaser if the seller defaults on the loan; and(D) the following covenants are placed in the executory contract:(i) a covenant that obligates the seller to make timely payments on the loan and to give monthly statements to the purchaser reflecting the amount paid to the lienholder, the date the lienholder receives the payment, and the information described by Paragraph (A);(ii) a covenant that obligates the seller, not later than the third day the seller receives or has actual knowledge of a document or an event described by this subparagraph, to notify the purchaser in writing in 14-point type that the seller has been sent a notice of default, notice of acceleration, or notice of foreclosure or has been sued in connection with a lien on the property and to attach a copy of all related documents received to the written notice; and(iii) a covenant that warrants that if the seller does not make timely payments on the loan or any other indebtedness secured by the property, the purchaser may, without notice, cure any deficiency with a lienholder directly and deduct from the total outstanding balance owed by the purchaser under the executory contract, without the necessity of judicial action, 150 percent of any amount paid to the lienholder.

Obsolescence refers to deficiencies that effect utility and thereby value.