You’ll probably also want to talk to with a local real estate attorney who can make sure there aren't any complications under state law (state law controls what “real property” is for 1031 purposes).Disclaimer: Although I am an attorney, I am not your attorney.

In other words you understated your expenses by $1,050/month.

Here is a excerpt from a web page I found online: "Tenants have fewer rights under state law if they're renting a room in your home.

I did find this article: https://www.nolo.com/legal-encyclopedia/new-york-state-home-sellers-disclosures-required-under-state-law.html

At what point did you feel confident enough in your understating of the numbers and market to go out at buy your first deal?

The more understated the better.

Terms will vary by state, based on ease/difficulty to recover under state law in case of a borrower default. 

The prior landlord is liable to you for the rent, the deposits should have been addressed and collected at closing, even though under state law he is likely liable to you for those as well.Off to small claims court you go!

To clarify, I agree with @Stanley Bronstein that the right to pursue specific performance May be available under state laws. 

@Michael Vu I agree with @Tim Herman that your expenses for vacancy and CapX are understated (I also use 8% for vacancy, because 1/12 = 8.333%, and 10% for CapX, though these are just estimates).