So, how do I protect myself if the person I assign it to screws up and back out too late to recover the earnest money:Should I ask him for earnest money at assignment?

I would just find a collection company and send his account to them to try and recover any costs. 

I just saw a report that was saying 18%.Of course there are markets like Washington that are heavily leased up but nationally it hasn't recovered fully yet.I can see a lot of adaptive re-use like your article mentioned.

Report it.You probably will not recover anything from the actions, but may help others that do their due diligence.Sorry to hear.Hope it all works out.

By then the market will have recovered significantly and I'll have missed out on the best period for buying real estate that I'll see in my lifetime.So now we've come back to the basic option of "You're not cut out for this," where I'm being told to just give up, that there is nothing I can do but shovel my paycheck into a depreciating savings account or some pitiful returning mutual fund.

If any party commences an arbitration or court action based on a dispute, or claim to which this paragraph applies, without first attempting to resolve the matter through mediation, then at the discretion of the arbitrator or judge, that party is not entitled to recover attorney’s fees.

I'm including this in my leases:The statements and representations made by Tenant in applying for the apartment have caused the Landlord to enter into this agreement, and if any of these statements and representations should be false it shall be considered a substantial breach of the landlords rules and regulations and of the terms and conditions of this Lease Agreement, and Landlord may terminate this Lease Agreement and recover all costs and expenses incurred as well as possession of the demised PremisesMake sure they understand that and it's one of the first things in your lease.  

Has your renter recovered fully from his health issues?  

While I am sure it wasn't very funny to you at the time, I'd bet that a story about the yard of your rental being dug up in order to facilitate a mud wrestling showdown has to be a crowd favorite at parties.I am curious, though; did you make any attempt to recover the damages done to your property? 

I lost mid six figures in equity during the last downturn, and have houses that still haven't recovered.