Pet deposit is $250.

Its all legal and now you only have to maintain a place for 5 groups. 1) you can get a heavy cash deposit down for the ownership. 2) they pay quarterly for expenses that funds the overhead. 3) everone has a share of profit when you or they decide to sell for a higher price.

I would be surprised if there weren't notices given to both the defaulting End Buyer (You're in default, you must close by X date or we're forfeiting your deposit) as well as the escrow agent (Buyer defaulted, see contract Earnest Money paragraph regarding release) prior to that actually occurring.

You identify the problem (lack of deposit) during your inspection phase, then hit them with an objection that requires them to pay you a deposit at closing.

Parents had all of the money available as they had a good enough income to pay deposit, 1st month, and move in ASAP. 

3. what type of deposit / reserves can you provide in case the monthly rents you receive do not cover the rent you pay me?

His wedding venues in Dallas all shut down suddenly recently & left many couples out their deposits & venues!

Sometimes it can be difficult to collect and some landlords will keep any unpaid utilities out of the security deposit, though CA is one of the trickier states to do this in.

Put down deposit, lease isn't signed. 

Ask them if you deposit say $250k with them as MM or CD with them having control over it.