If the seller files for bankruptcy, that will involve you in a legal proceeding.

I frequently see where one party is awarded the property and debt and is mandated to sell or refinance it within a certain timeframe to have the other party removed from the note/mortgage.

Or do they leverage debt, and use the subsidies to cover the equity needed?

He has no legal rights to the property or the deposit because it belongs to the legal occupants of the rental.

Really your advantage is using your legal prowess to better appraise future deals. 

Did they previous take on bridge debt and has that caused them undo "pain" in the recent years?

An LLC is useful for two things: anonymity and legal protection.

Further context, I have zero debt, high 700s credit score, one other investment property here locally. 175k in cash available, looking to do DSCR loans or cash and then refinance.Peoria, Illinois- Great need for lower income housing, market appears to have many options.Lawton, Oklahoma- Looking only at extremely cheap properties, as it seems it’s not terribly hard to find renters.

Most who respond recommend creative financing....seller financing, sub to etc. or using highly levered hard money debt. 

With its robust legal framework, consistent economic performance, and favorable interest rates, Germany stands out as a top investment destination for foreigners.