I failed to mention that I will be handling the labor myself.

We already signed the lease agreement but my tenant failed to pay his security deposit and first mo rent through cozy.cohe said he will pay when i get a occupancy clearance from the village.

It seems to me if there are wholesalers trying to sell properties for too much, either they're going to go out of business (keep an eye on their failed deals), or @Jay Hinrichs is correct and they've found people who are willing to overpay for whatever reason.

With a SFH if your property manager fails to screen tenants properly or your tenant has something unexpected happen where they can't pay rent you could be going cashflow negative sometimes for years because of one eviction or one unforeseen repair.

He failed to find out there is an open permit on the house.

There are many examples where lenders have assured an investor that there would be no issues with the "take out" loan yet they subsequently failed to get the loan through underwriting... becoming a huge problem for the investor.  

I suppose the lender could appeal to the IRS that they accepted a deed in lieu and that the debtor is deceased but if i were the IRS, i'd say, "So...i still have a lien so, you'll have to foreclose and wipe me out after i fail to exercise my lien". 

@Jennifer T.Hi, I guess i failed to mentioned in the discussion that, that's exactly what I'm looking for.

Read these books:Rich Dad Poor DadRichest Man in BabylonThink And Grow RichMany people fail because they don't start with the fundamentals, challenging their view of the world (philosophy), so they give up and say this REI thing is "not working".The 10k Seed Capital is great; however, many here on BP started in debt of 50k or more and are now crushing it. 

While I understand the idea behind, it seems like it will fail in execution.