I am in the process of buying a property in NC from a wholeseller who, I suspect, has acquired the property using a section 2 deal.

The accused tenant has been there several years and has always been very dependable with no previous reason to suspect a problem.What do I do?

Unless those rents are significantly under market (I suspect not in Cleburne), it wouldn't be worth the hassle to me.As others have mentioned, tax assessed value is not a true appraisal.

I hesitate to recommend anything that uses an on-site DVR as essentially that's a huge single point of failure if it gets stolen/destroyed and live backup cameras usually cost some $XX.00 per month PER camera and are suspect in reliability. 

This is why make me suspect at first place.

I suspect that's what's going on here.Earnest money should only go to a title company, not one of the parties involved in the transaction.

The paranoid side of me instantly becomes suspect.

Intent can change but the sooner it changes the more suspect the original intent is.

I suspect unless you have tenants proven to be in your past tax filings and have written lease agreement, that is the potential income projected not actual income.

I suspect if we hit a correction - many people will get burned and my deal rates, response rates, ROI will all improve.