It is likely negative, but if the loss is LESS than you currently pay in rent, you are still in a better position than today.  

I take responsibility for my losses and injuries as a result.

Liquidated damages are paid by you regardless of how much damages the Seller actually suffers(ed).For example, if the EM is $ 25K and the Seller resells the property to a new buyer with an actual out of pocket loss from your breach of $ 10K, an argument can be made that Seller should not make a profit, unless the contract allows for such a situation.2.

As long as I have put in the efforts to minimize the magnitude of my losses, I feel I'll be at a net gain no matter what simply because of knowledge received.

Be sure to get a higher deposit to cover the higher risk of rental income loss.

It may not even be feasible to increase the residential occupant load of the buildings based on how the subject buildings construction is classified, number of means of egress, widths of egress, etc etc etc, Yada, yada, yada...~ OR ~You could hire a Registered Architect who could provide you with a professional feasibility study and report regarding your modification proposal that would take the above factors into considerations and give you a sharper insight of what you can and cannot do.  

Hey Ralph,I think either of those options seems feasible.

This is a fix and flip loan Yup, the market dried up lenders are tightening up to mitigate losses and costs. 75% LTV is the highest I have. 

For you though, right now, you need to weigh your losses and how much you want to press them on the contract.

My two cents on this: I would never agree to a contract like this if I was the seller, unless I was motivated and had to sell the property at any price/loss.