The clause should explain exactly what happens if the bank defaults and under what conditions the earnest money is returns or not returned.I understand this is all  new to you, but this should be child's play for an attorney.

There are some considerations at play here.

Yes we Landlords want to protect our investment properties but in Chicago your tenants win if you don't play by the rules of tenant rights.

Should I setup the LLC now and do my first deal under the LLC or just play out the first one to test the waters?

I recommend staying away from bad areas and focusing on somewhere where your long term exit strategy will play out.

Otherwise if you call and just say that you are confirming the showing they may just play dumb and go along, then not show up anyway.

Understood that some people will recommend starting out in SFH, however the idea of buying right, forcing appreciation through strategically increasing the NOI, and refy-ing out capital that can be used in future investments plays to my personal strengths and feels like the right strategy for me to pursue.

I know there are many variable that come into play. 

But this time, he had to make up a large leftover powerbill of his dead roomates he didnt expect.

We're not playing with Monopoly money here - - be cautious.