@Michael Lynch Hi Michael, I am in the exact same situation as you were with a grant on my home in 2nd position that covered downpayment and closing costs, 20% being forgiven every year.I'm curious about what you ended up doing or if you found a solution.

Ordinarily those tenant vacated damages would be too remote, but it sounds like they were contemplated by both parties at the time of contract.Were I in this situation I would be looking to state law to determine if the EMD is truly the extent of my potential liability as a buyer. 

In this IDEAL situation the savings is minimal.  

The city of Cairo and Alexander County as a whole are in a very depressed economic situation.

Quote from @Shiloh Lundahl: Hey @Marcus Auerbach and @Joe Villeneuve you both have great points.In my situation, I am in a market that has appreciated out of positive cash flow for the average investor.

@Nathan Gesner pointed out my situation. 

I wanted to share a bit about my situation and get some advice from those more experienced in real estate.My wife and I live in Irvine, Orange County, as renters.

When it was all said and done, our bad tenant cost us over $30k.The financial hit was certainly tough, but there was also the feeling that we had no control over the situation.

If it happens a second time, tell the tenants who are making the noise that they need to stop or they are in violation of the lease.This is solid advice and exactly what I would do in this situation.

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