Thanks for clarifying that its $7,000. per year, for as long as the loan is outstanding!

I would think 1) they agreed to the written terms of the contract, that had they wanted any of their funds credited or returned along with the purchase, that should have been clearly stated in the contract, and that 2) both parties likely signed something at closing stating that the terms agreed upon at settlement represent the full agreement, that there are no surviving outstanding issues. 

Often I'll call local utilities for outstanding unpaid bills, I also ask for a utility usage report, I can see if the place holds heat or air conditioning, perhaps a faulty water line. 

All amounts are first applied to outstanding late fees, then rent, then possibly utilities or similar. 

Either I'm an outstanding tenant with the extraordinarily bad luck of running into LL's who, as you allege, cash grab from the margins; or2.

(A reimbursable billing)  If they didn't pay, I deducted the water bill from their rent, which made their rent late.Now...this is stipulated in the lease agreement, that any rent received is applied to any outstanding bills they have with me. 

I have a couple of HELOCs and both have a 15 year interest only draw period, followed by a 15 year pay down period that fully amortized the outstanding balance over the 15 year payment period, so@Jon Holdman 's durations might not be what you get - but that could certainly be what you get.

Or, they have really bad credit, like they are late on everything and or have too many accounts in collection are in bankruptcy or have outstanding federal tax liens or judgments.

It is there to cover repairs, cleaning, outstanding utilities and other deficiencies when the tenant moves out.  

As we all know, I am now stuck with moving forward with conventional financing on my next purchase/s.The value of my holdings is well over $3M+, the outstanding debt is under $1M, so I have tons of equity and positive cash flow.I would love to continue this course of acquiring homes and building my holdings to a significant number.I am very happy with the investments I have, and realize that If I can triple this, it would provide fantastic income!