The buyer wanted to buy it as is to add their own personal finishing touches.

Think about it... if you bought a property for 50k and placed 50% down you would have approximately 25k left from your capital and an asset that has equity in it that you couldn't easily touch.

They are touch little buggers.

If it's good enough, you might touch it up as a book for small investors, LOL.Including different sources of financing is a good thought, however I doubt you can drill that deep into these sources as to their functioning requirements and how that applies to the borrower's planning in two months. 

For instance, if the children are running around, touching things and the parent did not do much to stop them, I will see that as a red flag.  

Also, should I have my realtor get me in touch with these sorts of homes, or should I visit HUD.gov and get a list of my own, contact the sellers and make offers?

I would also like to find something that won't be really cold to the touch ideally. 

OTOH, I no longer have any direct touches on the properties that are being funded, and I do miss that part a little. 

Did you just touch up exterior paint only?

You've got several things happening here, none of which I would touch without a lawyer's advice.If the Seller knowingly withheld non-obvious information material to the property (possible pending litigation), I don't see how the Seller could not be held responsible if this goes south on you.Second, service animals have certain protections.