Give them room to fail without the risk of losing their job.

He can lose the EMD also.So the question remains what does the contract say about keeping the EMD if the buyer does not perform? 

Whoa, whoa, whoa there.Go get your job going again.Do not spend money you do not have on a guru - that is for people who have money to lose AND, the information is out there to be had for free.Live frugal and save your money.

That's a lot of inventory to lose year over year.

I'm concerned about my properties flooding, my tenants wiping feces on the wall, my tenants losing their job, my properties spontaneously combusting...but not that.

Anything that you cannot prove was caused by tenant, let it go. if they take you to court you will most likely lose. any rehab costs should have been considered in your acquisition price.

You could lose your buyer by allowing the tenants to leave.

I was kind of wanting to start smaller for my first property, and keep to around 40-50k (that way if it didn't work out, I could afford to pay the loan and not lose my house).I'll also be transferring the cash to an LLC in order to build equity/assests for that, so that's a reason I decided to go the route I'm going.

Vacation rental may not be the best investment for your 401k, and because you can't manage it yourself should you live your money in the mercy of the stock market or in the money market account losing it's purchasing power to inflation?

I just feel like they may be losing out on a lot of business due to the 80% rule.