Of course if I can’t find favorable terms then I’ll basically do what you’re saying, but it’s my backup plan

Even if you were in a market for favorable for investing (cash flow investing at least), house-hacking doesn't always pan out to be what people assume it is.

S Corps are no longer a "no brainer" and it's better to make an S election a year or two into the business than set yourself up from the start in an S Corp that is actually not favorable to you in this professional's opinion. 

I deal with contracts - non RE - frequently, and they always favor the person who writes them. 

I used to beg for turntimes of under a week, calling in favors and stuff like that.

Additionally, taxes are more favorable.

If I see that the situation is playing out in my favor, I will simply execute against the plan that is already in place.

Even if they are real, if these are high end tenants, there is a good chance it's just a friend doing them a favor and playing the odds that it will scare you into complying,Assuming your state Landlord tenant laws allow, I would inform them that they broke they lease (certified mail, heck, if you know an attorney, check with them, they might write something up for for a reasonable fee, what's good for the goose...) and you will be retaining the deposits to cover the last two months of rent owing.For the future, you might consider some adjustments to your lease.In my state, fees and deposits are clearly and distinctly different in at least one key regard:  All "deposits" are refundable, even if you were to state a deposit was non-refundable in your lease, state law would over rule and you could be forced into refunding a deposit.For that reason, I never collect any deposits, everything is clearly stated as a "fee", as being non-refundable, and further spelled out that any exceptions for being refundable are at the sole discretion of me.I also collect "last month's rent" and it is clearly stated as such in the lease, it is not a deposit, it is a prepayment of the last months rent, and hence, the only way they ever get the last month's rent back, is when they use towards their last months rent  (this has never been a problem).I agree, that you really have lucked out here, if they didn't damage the property, them moving out is really a blessing, even if for some insane reason you did and up giving them half the deposit back.Document everything. 

I also caution that not all owners are being given favorable payment terms from their lenders.  

Is the deal good enough that you'll be able to refinance to a more favorable rate later?