The house was rehabbed with good quality materials and overall looks great but should I be worried with unpermitted modifications?

But as it has been explained to me, should something happen on the property, because of all the un inspected modifications, I would be on the hook.

The contract is almost always provided by the owner using an AIA template contract with owner requested modifications.

ThanksI don't allow my tenants to make any modifications to the property such as repainting, installing new flooring, etc. 

This almost always necessitates the NRA file a 1040NR to reclaim the excess withheld, further adding to the compliance structure and cost.A lot of hedge fund managers don't like to have NRAs come into their LPs specifically because they find out about these obligations during tax time and don't like what it does to their compliance bills.A "blocker", i.e. establishing a US C Corp between the NRAs and the US investments, does solve this problem, but again, all factors need to be considered for a holistic approach -- minimization of US tax liability, Canadian tax liability, and compliance fees in both countries.We are talking about an individual Canadian purchasing US real estate, not participating in a syndication led by a US controlled entity.  

I have a lot of ideas of how to spruce the place up but I'm going to need more time than just a quick walk through to figure out what needs to be fixed, updated and what types of modifications I want.

You need to know if they will sell, about how much they are behind, when the sale date is, who the lender is, have they done a loan modification before, and many more things like that.