I suggest these area because of the tenants usually be great quality, section 8 (government housing authority) qualifications are easy to clear.

Both have the exact same authority.  

Have you talked to the local authorities?

So who has the authority to tell the occupant to vacate their own home?   

Is the water authority ready with the auth forms, yes/no?  

For reference, I authored two books for BP, one of which is specifically geared towards teaching the methodology for estimating rehabs...feel free to check it out:http://www.biggerpockets.com/flippingbook

Allen, author of "Nothing Down" - says, "Everything you want in life lies just outside your comfort zone."

So at the time that I'm authoring this post I'm still in the assignment contract even though there is not one currently active with the owner of the house.So my question is, at this point could I walk away from this deal and get my full deposit back?

Option 3) Even though the bill is in the owner's name, the Water Authority can mail the bill directly to the tenant to be paid directly by the tenant.  

Talk to the authors and the interviewees - the ones that you feel they know what they're doing.