Also the Treasury will take the position of substance over form.

This would actually increase the cash flow you're looking for but harm some of the other metrics we look at to determine the viability of a deal.Cap ex and repairs may still be a combined 5%-15% too low and you also have to take into account lawn and snow expenses you'll have to address throughout the year, unless you put this back on the tenant, which can be dangerous from a liability standpoint but it certainly isn't uncommon.The biggest thing that kills this deal however is that there is no management expense factored in as you did in your last. 

You tying up the property does no harm to you.

My wife and I are relatively new to the investing game. We have no debt except the 2 houses we own ($240,000 total mortgage debt). One property cashflows $550 / mo and the other is our primary residence / airbnb and...

I've responded in a previous post you made that you can potentially make money in a preforeclosure with no equity in a short sale, where your in-depth experience in short sales would benefit you and the borrower but, based on your posts, if you tried that, it appears you would do more harm than good for all parties involved, and possibly subject yourself to some litigation.

Tenant shall not use caustic substances such as Drano or Liquid Plumber in the toilets or drains.If a drain or toilet does not flush and Tenant cannot unclog it with a plunger then Tenant shall immediately contact Landlord but NOT flush again.

There are three types of funding, all 3 defined on how you pay for them, and how you use/spend them...thus what the cost of each are.1 - Cash:  No cost, one use...but if your plan is correctly laid out, you should have an infinite number of uses of your cash.2 - Leverage/Debt:  Cost to you, but you get only one use per cost.3 - Cash-like substance:  This combines #1 and #2. 

You never took the property off the listing, so no possibility you missed another opportunity to lease the property.How do you prove you were harmed?

If you know she is fine on her own and all parties agree that wife will pay his portion of the deposit and everyone agrees in writing that he can be released from the lease and get half the deposit back...No harm no foul.

No harm in asking.