Meaning that if you fund a $5K EMD and then decide not to close you lose the EMD, or you pay for an inspection up front and risk missing out on the deal while you're waiting for the report.

Hope you don't put down large earnest money deposits... these guys will make sure you lose them! 

- Land Contract would be better:)Question: how are you going to lose $2500/month if you rent?

If you put the house in her name and you have siblings or other folks who would have a claim as a direct heir on her estate, you run the risk of losing the property to another heir. 

You're going to lose your loan from what I understand.

Aren't they losing money?

So all of the gain and depreciation recapture are initially still tax deferred.However, like Joe said, the down side is later when sold  you lose the 1031 option. the client will pay tax on all gain and depreciation recaptured from before the 1031 also. 

How can I lose???

This property gives me significant income, so losing it would be an extreme loss.

I could care less what happens to the prior homeowner or if they go after him, as far as I am concerned.