The only way to not pay a judgement is to go bankrupt.

Not to say that I wouldnt use good judgement on investing it, but I rather just pay on the money that I use (heloc) rather than withdrawing the whole equity..And I think my exit strategy for the time being is buy and hold rather than flipping; since im young that tends to make sense.

Anything in between is a judgement call.

If you were to be sued personally or go though bankruptcy, your IRA is generally protected to $1M, depending on a few factors such as your state, the type of judgement, etc.

However, your father may still be on the hook for a deficiency judgement for any remaining unpaid mortgage balance.  

The last thing I'd do is put down an EMD to get something under contract before I visited a property that's so poorly managed (not to be overly judge mental) that there are no lease agreements.

Them you could move forward with an eviction and filing a judgement against the tenant, hopefully this will stop them in heir next attempt at the next unsuspecting landlord.

If you do forego the deposit, the best protection you have is proper screening and ensuring you get all accurate tenant info and everything documented in case you need to file a judgement. 

Just be careful, and make sound judgement. 

@Wenhao Leu You will not be able to get a conventional mortgage loan with an outstanding Judgement on your credit report.