Property taxes - why am I paying this upfront in closing to the lender rather than directly to the government?

Payments from brokers to their agents are governed by the independent contractor agreement between the broker and the agent, not the listing agreement between the broker and the seller.

I am in an area where the city, government etc... stays out of our business too. 

Stay off the government radar as long as you can.

I basically see the big guy getting into something they should be getting into and the government's letting it happen.

A key difference with section 506 investments concerns the products themselves: they are not regulated by the SEC and Investment Company Act of 1940 which governs stocks and mutual funds.  

I still work the day job but in a government role for quality of life.

There are very unique opportunities like working with government to build and provide housing, or create a business that renovates rentals for individuals with physical disabilities... flats with wider doorways, handicap accessible bathrooms, lower counter tops, etc. 

If deposits are allowed to be withheld to cover for rent owed you are good to go.Read your state regulations, you are required to know the rules governing your business.

They are also subject to rules governing service termina­tions to multiple dwellings, customer security deposits, payment agencies, back-billing and the refund of overpayments.Municipally owned water suppliers (those of cities, towns, villages, etc.) are not governed by the Public Service Law.