The previous owner used it for illicit activities, and was a general menace to the rest of the owners and tenants.The bulk of the work is in the bathroom, with water damage to the sub-floor, and a bathtub shower combo which was full of mold/mildew.

The risks I can think of are theft, vandalism, damage during construction, injury to a worker.

That's the minimum acceptable condition of the property that HUD requires before they allow the lender to convey the home over to HUD and pay the (mortgage insurance) claim.A lender may have their field contractor go out to get the property ICC only to have it vandalized, stripped, etc, then they have to get new bids and fix new damages.

These are important, because you need to protect your investment from further damage.  

They're probably in distress to be calling you, so you playing games with their finances like that can do some real damage if you don't perform under the terms of your contract.Btw, I have to agree that wholesaling is simply brokering without a license the way it's being taught in some places...lots of people with no education trying to flip with no money, no experience, no knowledge out there muddying the waters.We all gotta start somewhere I guess, but man they've distorted what wholesaling is to sell books and courses IMO.

The SD can be used to cover damage from pets if need be.

We run through it with the tractor and of course have to clean it before putting it away til the following weekend and luckily we spotted a tie out before running over it and possibly causing damage to the tractor.I want to at minimum send an e-mail addressing the subject...would prefer to just have a face to face (see them often).

The security deposit that was transferred to you upon purchase of the property is still for you to use for unpaid utility bills, damages, etc.

Some states would actually require the landlord to provide the tenant full compensation for damages for not providing the unit on the date stated after signing the lease (temporary housing, storage costs, etc.).  

if she leaves you would process the move out check list for repairs and damages.