I'd look at land value and land development to capture substantial upside, I'd look at 50+ unit deals for entitlement, I'd self perform land acquisition and land development in a midwest market like columbus that allows for substantial gain and represents a more stable long term growth, but when you break down the industry new construction is very stable you are already doing that by just working in new construction. you'd essentially be the developer on a larger deal you could do that in one deal. lol 

For example, if the tenant breaks a window and you spend $250 repairing it (materials & labor), you bill that back to them to be paid with the next rent payment.

No one is entitled to a tax break.

Your situation sounds like a classic investor's dilemma, and it's great that you're considering all angles before making a move.First off, it's worth considering what the "rip cord" would be for your investment—essentially, what's your financial breaking point where you need to make a decisive move to avoid further losses?

My house hacking criteria for the last few I have done has been to buy the most expensive 3-4 unit I could with it still at least breaking even after all expenses as a long term rental.

I was going to say On DMonte, which is listed, aside from keep dropping price, all the way to break-even point (mortgage balance) eventually there isn't much else you can do, but I just saw its showing pending online... so did you manage to get it in escrow?  

Great for Passive income,tax breaks,city of SB have many programs to assist investors/landlords as well as possible owner/occupant.

The deal I chose was somewhat at random, but also looking at price points and neighborhood ratings I thought would be good for a first investment.Below is my attempt to break down this deal. 

Am I obligated to return the deposit (minus any that goes to cover damages beyond normal wear and tear) even though he breaks the lease?

Attorneys cannot knowingly assist someone in Breaking The Law."