Establish a screening criteria and apply it equally to all applicants to ensure compliance with Fair Housing Laws.

It sounds like if we start increasing rents and or deposits based on the tenants qualification we need to have a clear criteria documented on how we established the increase and keep it consistent for all applicants across the board.

As for the size of lots of new homes, not all homes are built in new subdivisions with small lots, in fact, there are many opportunities to buy larger lots in established neighborhoods. 

I was told by the contact at Preferred Alternatives that the person they are calling for does not have any credit established and is on a fixed income.  

This is unfortunate, for now you have established a precedent.

Once the lender establishes that the delinquent borrower has vacated (correspondence with the borrower shows a new mailing address, for example) the property, then the lender knows that they will have to re-key and perform preservation measures - winterizing, board up broken windows and any openings, cutting grass, etc.

In the mean time you can establish a credit rating to enable you to obtain conventional financing later on.Good Luck !

Some might even say gambling.

Perhaps the established wholesaler with personal connections to real buyers who can accurately ascertain whether a deal can be done quickly is performing a service for sellers.

The home is nearly 5000 sqft and in an older established neighborhood.