In either instance, I would certainly have an attorney make sure everything is buttoned up and legal to protect you both.  

More things happened than what was listed above, but I think my mind has blocked them out to protect my sanity.  

It sounds as though your REALTOR didn't do their job to protect you and the Seller is trying to scam you.The first thing I would do is talk to your REALTOR.

I have been looking into setting up a holding company in Wyoming for asset protection and moving all businesses and future rentals into this holding company.

So I just saw this post about Section 8 HUD tenants, and this post stated something along the lines of section 8 tenants being more likely to damage properties because they're section 8 low income tenants, and also something about investors not wanting to put money needed into Section 8 properties because they think they're just going to be ruined by these Section 8 tenants, and as someone who knows the entire process with investors, owners, contractors, tenants, and prospective tenants, this is what I have to say about it:In my experience, Section 8 HUD tenants are actually better custodians of the property because of many factors, but 3 of the main reasons being, there is an annual HUD inspection that is performed on each property, so this gives the owner an extra 'protection vector' against damages, also, the initial placement of a Section 8 HUD tenant requires a passing HUD inspection, therefore there's a record of the property's initial state prior to move in, and additionally, they want to have an easy renewal voucher process annually, and their unit remaining in good condition is an incentive for those reasons, therefore they are LESS likely to damage a property - their future depends on it!

@David Krulac I know this post is 6 mos old, but with everything you state above, how is it that you bid on these courthouse deals and protect yourself?

Using an LLC can provide liability protection and business structuring.

The PSA is always going to protect you in these situations as of course a dishonest buyer is always going to jump on a deal if there is nothing prohibiting them from doing so.

I'm weighing on buying a "A" property though. 1) I heard that section 8 in a way offers downside protection for land lords.  

While it’s good to help others, you must protect your business first.Today, we’ve refined our processes and now consistently earn an average of $35,000 per wholesale deal with minimal stress and mistakes.