Other wise you'll lose your EMD.  

I break in plenty (if a window is open or something).Selling its worth losing some appliances once every 10 years versus driving to a house to show every Looky Lou that comes around.Maybe you're in rougher areas than I work, but I have way more trouble with contractors stealing from me than I ever have with buyers.

Then again I only buy single family homes from people who are going to lose them to the bank anyway.I agree with @Dion DePaoli to go with an installment sale.

Go with your gut - if your gut tells you something's off, it's far better to lose a sale...

I've picked up several of these deals & closed them over the last few months.One could not be closed, and they faced the choice of a HML or losing their EMD

If you have an apartment building and the Hells Angels moves into one of your units, you need to move them out or risk losing your good tenants.  

What happens if we go into a deep recession, (Which is never out of the question) and you lose your job?

I really want the house, but at the very least I do not want to lose all the money I have spent already.  

Even though you are trying to do the right thing, there is still a natural law of "survival of the fittest" - these "investors" will eventually either stop hiding and realize themselves they have been taken advantage of - or lose the home from city code violations,  or maybe a foreclosure forthcoming.

Figure out the cost of lost opportunity for the funds you will lose earning power on to put 20% down to avoid PMI and PMI is the best thing you can have.