To calm your fears a bit, I'd say you can ask for some additional deposit funds as a condition of renewing their lease if you're concerned that their damages will eventually overrun the security deposit.

But even there, February’s median closing price of $337,250 is up 12.8% on the year.What might calm the frenzy of what observers considered an already overvalued market spinning off 20% plus annual home price gains?

Most private placement deals I see have a LP/Sponsor waterfall that incorporates a Preferred Return, whereby the LP gets a stated rate of return before the Sponsor gets any money.The Preferred Return can be based either on the Initial Capital Contribution or it can be based on the Unreturned / Unrecovered Capital.

Due to the automatic annual increases set upon in the long term lease upon purchase there is built in forced appreciation, and the profit split for the exit is similar to a waterfall hurdle for multifamily or MHP deal.

Update (again):My realtor is trying to convince the seller to calm down since we are surely to buy this property.

Fun-fact, on '09' everyone was saying the same thing, that they were waiting for things to calm down, go "back to normal", those of us who were investing at the time know the truth that we were the 2%, books and programs now are written to make it seem as if it was the popular action, it wasn't.  

As with all the other investors with CALM INVESTMENTS was never compensated for any of my losses, which was every penny put in his Company.

I have meet people that are stressed with 2 rentals and other investors that are calm owning 1,000 doors.I manage my stress by keeping good board members around me to talk through problems and ideas.  

I am going to follow up with them on the phone tomorrow, when they have hopefully calmed down. 

Now that I have some spare time and my work chaos has calmed down quite a bit I am thinking this is a no brainer to sell, capture these profits and possibly pick up a few rentals for a retirement plan years down the road.