I have virtually no assets to protect at this point. 

For those who are using conventional financing for a few rentals--or those who have in the past used conventional financing--I'm curious about your strategy for liability/asset protection.

Depending on the circumstances, there may be liability protection to be achieved that way.

The purpose for this clause is to protect me in the event that I don't successfully close on escrow #1. 

I relocated to help out my Father, who is suffering with health issues.

The property suffered a fire recently and will likley need between 35K adn 45K of work depnding on how intense things get from a rewiring standpoint.

Yes, Yes, with proper deposits and built in protection with rent prices via maintenance reserves.This is one method we are considering rather than trying to find a flip to increase investment capital this year.Thoughts, considering low Cash on Cash but possible increased investment capital through equity?

I would make sure you have adequate insurance and hold your properties in an LLC to protect your assets.  

@Anthony He  There ya go.... trick now is to find a market that is under the radar and does not suffer from the California effect...

Can you think of any important information that I need to make sure is in the agreement for my protection as well as the sellers?