Have you checked with an SEC attorney to make sure you know how to legally raise money? 

Their answers are always along the lines of "no money down" or "you can use it basically an unlimited amount of times".

While I want to make money, I am not greedy, and believe that if I can come up with the right model, I might be able to scale my MTR cash flow?   

If there's a clause that allows you to back out due to new findings or due diligence conditions, you might be able to retrieve your earnest money deposit.

While I am a lender, I personally use hard money on all of my own investment projects.

That means that unless your state allows you to just keep their money you have to try to re-rent the house.

One of the biggest mistakes newer investors make is over-rehabbing houses and spending too much money on these low ARV homes.

I won’t lose any money or no recourse for defaulting? 

You have NO leverage, no matter what he builds or does not build, except for the developer saving some money in legal fees and cutting down on mesne profits damages.

I told them that I work with real estate investors that would be able to help them and put some money in their pocket to help them with their crushing debt and bills so they wont go into foreclosure on both houses How did you finance this deal?