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You are already ahead of the curve acknowledging the risk associated with high leverage.

The title insurer should be able to close with a special exception for the notice along with a notarized acknowledgment from the buyer regarding the exception and how to remedy it post-closing. 

If the previous owner or previous tenants have left washer and dryer, we will leave them with the written acknowledgment in the lease that the existing washer and dryer will NOT be repaired or replaced, but will be removed, if the tenant requests. 

It's good that you're acknowledging there will be learning curve but the only lesson you are going to learn here is not to build the least expensive home humanly possible ever again. 

In the past I have texted him on several occasions times letting him know that the state of the yard was unacceptable and he acknowledged that he needed to do better, but I don't have the incidents well documented with dates pictures, etc.

And finally, I'll also acknowledge that some Housing Authorities are better than others.

A 3–4 star review is fair, it acknowledges they made it right, but also signals to other hosts that this wasn’t a perfect stay.

Closing the deal is of minor importance, as long as everyone acknowledges his Mensa status.  

Definitely a common challenge with newer rentals and builder-grade paint.Since you already acknowledged the issue before lease signing, it makes sense that the tenant is following up.