@Bruce Woodruff points out you can lose all your money and more. 

And this is a biggee wading through the fake lenders or the Joker brokers that tell you what you want to hear  but cant get the deals funded and you lose the deal and a lot of money.3. with actual PML  private people  usually have very limited funds so cant scale with them.. they can have a life event and just stop doing loans all together..

There is still a risk: You do not have the right outprice and lose money, your deal goes south due to unfound things when you bought it, then the rehab phase brings them up, and you spend more, and the market changes, which is something that can happen on a moment's notice.

We need to close in 1 week and worst case I may need to buy all cash and refi to a different lender losing my property inspection fee the lender charged.Is this a townhouse or condo?

I was losing money every month and was done managing the property.

1) Yiu REALLY need to know what CA will  allow you to do, I don’t know, but the state may say too bad landlord, you lose. 2) Assuming your attorney (Or you if you’re able to decode the laws that relate to your situation and are willing to go to court in front of a judge against a “sick” kid.) think you have the right to collect the rent I’d give them two options. 

There are people here who have no problem losing hundreds to thousands in negative cash flow monthly.

Makes complete sense to purchase a property that breaks even or loses money.

Is it possible that at times you lose money (such as soft costs - paying for property inspections for example and the deal ends of falling through)?

NoIf you lose your EMD money could you get it back?