Past that it is bad-faith dealing to be backing out of contracts unless there is an undisclosed defect with the property or title that compromises the sale, which is an opportunity to come back together and renegotiate or exit the contract.Aside from that, the idea of "calling the sellers bluff" . . . .

You and @Alex Grosvenor definitely helped me see that this is a risky situation and could compromise the investment.

We are moving forward with seizing assets and garnishing wages.I highly encourage other landlords who are able to go all in and not compromise. 

Wordpress sites are extremely easy to compromise if you don’t install security tools and keep your site auto-updating.

If the cloud storage gets compromised, I have a backup at home. 

You can offer the same amount and come out of pocket, offer a compromise somewhere in the middle, or offer the appraised value if you don’t care if you get the deal.

You might to call a trusted source to find out if that is true without compromising yourself.

How about a compromise" Buy ONE property with $25k down, and see how things turn out?

San Diego is a fine balance of 1) what's in your budget. 2) based on your budget what are your desired areas within your desired lifestyle. 3) What are you willing to compromise to balance your budget with your desires.

Just amend the contract...try to compromise or split the difference...if that doesn't work, cover the expense...get the deal done and move on to your next one.