If there's no relative, then probate will likely be handled by public administrator and they'd be in charge of auctioning off the house. 

The first step when you are ready meaning you have gained all the knowledge that you are going to get out of webinars,E-Books, seminars etc... is securing the capital you need in order to proceed with your real estate career.

In order to mitigate risk, I asked that they provide 3 months of security deposit funds under the pretence that if they pay on time for 12 months I would refund all but 1 month or just apply the other 2 to their rent due. 

hi everyone, I need to know if I should bother with background checks and security deposits fur a garage rental?

Can you show that this transaction is against statutory law, case law, or against public policy?

you have to be positive that the numbers will yield profit for all involved parties. if you aren't sure of the exit strategy or how you will secure funds then you still have a far way to go. do you have cash buyers with verifiable proof of funds lined up?

I am sure the seller figured if you could come up with $400K and with the property to secure the loan, that the risk was low.

My thinking is that even though I won't be getting a great return (5-6%), I'll have 100% equity that will allow me to easily secure loans in the future.  

@David Khalfin Please read up about the concept of a Public Adjuster.

We have a line in our lease addendum that states if the tenant wishes to break the lease that they pay a one time fee equivalent to 2 months rent and forfeit their security deposit.