Typically if they break the lease, they still owe rent for the remaining months of the lease agreement + they also owe to cover any damage/repairs to put the property back in its condition pre move-in.

I want get some advice as to how to find good contractors or general contractors, what kind of steps do I need to take to screen them, and what kind of questions I should ask? 

I was trying to be conservative because I'm nervous about not being able to find a tenant and having to cover extra costs because I assumed incorrectly that I could get more for the rent.I was planning on occupying the upper, yes and it is already vacant.

The seller has agreed to carry up to 20% as a second note to cover the down payment, but I can not find a lender willing to go with that deal. 

I do this for any vendor I use each year, as I carry workmens comp on my properties for myself and workers I know aren't covered themselves. but if I can prove my vendors have insurance when I'm audited, so my insurance agency compute rates in my favor, because vendors had their own coverageAs far as lien waivers, it's good practice to have anyone that worked on the house sign they have been paid and a lien waiver is used for that. 

Also, can private money be used to cover closing costs?

The rent will cover the payment.

The requirement is that you study each day, don't let up until you see "Passed" on the exam screen.

So should be able to get 80% LTV at around 24k) I will make sure that my cash flow will cover all LOC expenses. 

The items that I gave the info for have many many light emitting diodes, and are also behind an opaque white cover.