There is no threat of a breach of a covenant because they breach would be prosecuted by your LLC against you individually and that wouldn't happen.

They will cancel your contract and potentially prosecute for damaging federal property.

Just as an fyi if you make a false statement, you could be prosecuted.

My HUD contacts have confirmed they are prosecuting people. 

Now that doesn't mean they will not investigate criminal activity and move to prosecute against it with other agencies help.The deposit WAS COLLECTED on behalf of the property manager whether they were licensed or not acting on behalf of you in a PM capacity.

We are going to make 5k flipping to these folks I know I will split the fee with you ...you do the work they put up the dough and creds..Be advised that some wholesalers doing this have been turned into the FLA real Estate division for doing transactions that require a license and it appears the state is prosecuting them..

The other seemed to have dragged on for about 3 years, and then was or is being dismissed for "lack of prosecution".

If one of these goes bad it could be deemed as a predatory action, contract or not do you have enough money to fight a jealous prosecution? 

Cash reserves are MUST and are not talked about enough... in my day when I had over 100 foreclosure I was prosecuting on LA based Turn Key buyers who had leveraged to the hilt and had to reserves I became the proud owner of all those homes..

@Neal Larkins The IRS would be really hard on you if they prosecuted.